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A N N U A L R E P O R T

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2012

WESTERN PRODUCER PUBLICATIONSWeekly newspaper, show guides, customer publishing, supplements and digital media, including:

• The Western Producer (weekly)• Saskatchewan Seed Guide• Crop Production Show Guide• Manitoba Ag Days Show Guide• Farm Computer & Technology Guide• Farm Progress Show Guide• Northlands Farm & Ranch Show Guide• Producer Auction Guide• Red Deer Agri-Trade Show Guide• See Scenic Saskatchewan• Techs & Specs• Canadian Western Agribition Show Guide• Western Canola and Pulse Crop Producer• www.producer.com• www.producermobile.com

FARM BUSINESS COMMUNICATIONSPeriodicals in newspaper and magazine format within specific regional, crop and industry niches, including:

• Alberta Farmer Express• Wheel and Deal• Canadian Cattlemen• Country Guide• Grainews• Farmer’s Product Guide• Manitoba Co-operator• AgDealer• Horses All• Le Bulletin des Agriculteurs

THE BUSINESS INFORMATION GROUPThe Business Information Group’s publications provide need-to-know information to key decision-makers who influence the decisions in purchasing products and services for their companies. The Business Information Group’s role is to act as an intermediary, linking buyers and sellers together helping to generate leads and to build brand awareness. This is done through our print, online, and event/conference businesses where our customers market their businesses to targeted readers:

• Automotive• Communications• Construction• Dental• Electronics• Environment• Government/Education• Insurance• Mining• Manufacturing & Processing• Medical• Occupational Health and Safety• Plastics• Pulp and Paper• Retail• Trucking

JUNEWARREN-NICKLE’S ENERGY GROUPJuneWarren-Nickle’s Energy Group is Canada’s oldest and most recognized energy publishing house. Providing authoritative print and online publications, data sets, maps, charts, and directories, we are the Canadian leaders in oil and gas, construction, and alternative energy publishing. The JuneWarren-Nickle’s Energy Group publishes and provides the following products and services:

• Alberta Construction Magazine• New Technology Magazine• Oil & Gas Inquirer• Oilsands Review• Oilweek• Profiler• Daily Oil Bulletin• Canadian Oil Register• Canadian Oilfield Service & Supply Database• Data Central• Oil & Gas Statistics Quarterly• Petroleum Ownership Structures• Petroleum Explorer• Rig Locator• Canadian Oilfield Gas Plant Atlas• JWN Maps & Charts• Canadian Oilpatch Technology

Guidebook & Directory• Heavy Oil and Oilsands Guidebook and Directory• Unconventional Resources Guide• Custom and Contract Publishing• Education and Training (Oilpatch 101 and Oilsands 101)• Online Advertising• Digital Editions• Website Index

THE BIV MEDIA GROUPPublishes a variety of periodicals and industry specific annuals:

• Business in Vancouver• Western Investor• Visitor’s Choice• Better Business Bureau Consumer Guide• Adpages• Invest in BC• The Book of Lists• Giving Guide• Green Space BC• BC Tech• Meeting Places BC• Meeting Places Alberta• Office Space• Property Managers’ Sourcebook BC• The Right Course• LifeSciences British Columbia• The Vancouver Board of Trade Members’

Business Directory• Vancouver Relocation Guide

INFOMINEInfoMine is a world leader in providing mining knowledge online, delivering content via our website, through corporate intranets, and by email.

The InfoMine websites provide focused, in-depth infor-mation and functionality encompassing most aspects of mining and mineral exploration activities worldwide. The websites are organized as a series of InfoMine Edi-tions which collectively provide access to the largest, most fully integrated source of worldwide mining and mineral exploration information. Each InfoMine Edition has its own specific audience and content provided in the local language.

• CareerMine• EduMine• Company & PropertyMine• NewMine• SupplyMine• LibraryMine

TRADE SHOWS AND EVENTS

Trade shows and Conferences:

• Canada’s Outdoor Farm Show• Sweetheart Bridal Extravaganza• Incentiveworks Seminars• The Business Excellence Series: -Leadership -Sustainability -Marketing -Philanthropy• Speaker Series• National Buyer/Seller Forum• Contaminated Groundwater• Carbon Summit• Basics of Plastics• SEIMA Brownfield Regina• SEIMA Brownfield Saskatoon• ERIS Breakfast

Banquets and Conferences:

• Accessibility Conference• Jobber of the Year Dinner• Resin Outlook Conference• Machine Build Expo• Sites and Spills Expo• Forty Under Forty• Influential Women in Business• Leadership Lessons from Influential

Women in Business• BC CFO of the Year• Commercial Real Estate Awards of Excellence• BC’s Biggest Deals (Corporate

Finance & Real Estate)• Top 100 Fastest Growing Companies• BC’s Top CEO of the Year• Rising Stars• Producer and Supplier of the Year• Top Projects Awards• Top 100 Breakfast• CostMine• CountryMine• EventsMine• MINING.com• InfoOil Careers

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• MapMine• InvestmentMine• CommodityMine• EquipmentMine• ConsultantMine• TechnoMine

Published and print community and daily newpapers and related publications, which are the primary source of information for the communities they serve including:

B.C. DAILIES• Kamloops Daily News• Prince George Citizen• Alaska Highway News• Dawson Creek Daily News• The Penticton Herald• Kelowna Daily Courier• The Daily Courier:

Vernon Edition• Nanaimo Daily News• Alberni Valley Times• Victoria Times Colonist

B.C. COMMUNITIES• Whistler Question• Squamish Chief• Bridge River Lillooet News• Coast Reporter• Powell River Peak• The Northerner• The Mirror• Pipeline News North• Real Estate Weekly• Southern Exposure• Westside Weekly• eVent Publications• Weekend Shopper• North Shore News• Vancouver Courier• Burnaby NOW• Tri City NOW• Surrey NOW• New Westminster Record• Maple Ridge Times• Richmond News• Delta Optimist• Langley Advance• Abbotsford Times• Chilliwack Times• Harbour City Star• Cowichan Valley Citizen• Oceanside Star• Westerly News• Campbell River Courier

Islander• Campbell River Courier • Comox Valley Echo• Okanagan Saturday/Sunday

ALBERTA DAILIES• Lethbridge Herald• Medicine Hat News

ALBERTA COMMUNITIES• St. Albert Gazette• Fast Forward• Bonnyville Nouvelle• Lakeland Regional• St. Paul Journal• Athabasca Advocate• Barrhead Leader• Lac La Biche Post• Westlock News• Town & Country• Didsbury Review• Innisfail Province• Mountain View Gazette• Olds Albertan• Sundre Round Up• Okotoks Western Wheel• Okotoks Weekender• Airdrie City View• Rocky View Weekly• Rocky Mountain Outlook• Cochrane Eagle• Carstairs Courier• Elk Point Review• Southern Sun Times• Prairie Post-West• Sunny South News• Taber Times• Vauxhaul Advance• Prairie Post• Bow Island Commentator• Lethbridge Shopper• Medicine Hat Shopper• Westwind Weekly

SASKATCHEWAN• Battleford News Optimist• Battleford Regional Ad Post• Hudson Bay Post Review• Tisdale Recorder• Parkland Review• La Ronge Northerner• Wilkie Press• Humboldt Journal• Yorkton This Week• Yorkton This Week Marketplace• Yorkton News Review• Yorkton News Review Extra• Carlyle Observer• Cross Border Advertiser• South East Trader Express• Estevan Mercury• Estevan Lifestyles• Weyburn Review• Weyburn Booster• Weyburn This Week• Assiniboia Times• Maple Creek News• Southwest Advance Times• Shaunavon Standard• Canora Courier• Kamsack Times• Preeceville Progress• Northwest Herald• Redvers Optimist• The Outlook• Kipling Citizen• Pipeline News

MANITOBA• Westman Journal• Thompson Citizen• Nickel Belt News• Melita New Era• Deloraine Times & Star• Reston Recorder• Souris Plaindealer• Corner Pocket Flyer• Flin Flon Reminder• Neepawa Press• Virden Empire Advance

ONTARIO• Thunder Bay

Chronicle Journal

QUEBEC• Sherbrooke Record• Brome County News• The Township Outlet

RHODE ISLAND, U.S.A.• The Times• The Call• Kent County Daily Times• Chariho Times• Coventry Courier• East Greenwich Pendulum• Narragansett Times• North Kingston

Standard Times

FUNDATAOne of Canada’s leading sources for invest-ment fund and market data offering clients the most comprehensive data on Canadian invest-ment products that is available in the market. At the core of Fundata’s commitment to fast, flexible client service and quality information is a comprehensive database containing more than 850 data points on over 20,000 invest-ment funds and 36,000 securities. This infor-mation is made available to Fundata’s clients through customized data feeds, software tools, and hosted web solutions. Products include:

ECOLOG ERISEcolog ERIS, the Environmental Risk Infor-mation Service is a database mapping service with additional products that was created to provide an accurate, quick, affordable service to the segment of the market concerned with land use and development. ERIS provides environmental consultants and engineers, land developers, mortgage brokers, real estate appraisers, banks, lawyers and municipalities with comprehensive information from a variety of data bases which help clients to be informed about potential environmental liability.

SPECIALTY TECHNICAL PUBLISHERSSpecialty Technical Publishers is one of North America’s leading publishers of reference and interpretive materials and manuals in print, digital and online. Subject areas include:

• Environmental Law• Business Law• Accounting• Occupation Health and Safety• Transportation• Training

INCEPTUS MEDIASpecializes in the development of interactive, multimedia programs for pharmaceutical sales representatives and health care providers. Offerings cover two primary areas:

Scientific continuing education (CME) programs:

• Provides medical practitioners with essential information covering areas of medicine and treatment relevant to their practice

• Permits medical practitioners to complete accredited CME programs necessary to maintain their certification to practise medicine

• Maintains a library of over 400 interactive CME productions covering a wide range of medical specialties

• Tablet-based sales and marketing toolkits and materials

• Provides sales representatives with an iPad-based sales and presentation application containing all critical sales and marketing materials

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20 1 2A N N U A LR E P O R T

President’s Message 6-16

Management’s Discussion & Analysis 17-40

Independent Auditor’s Report 42

Consolidated Statements of Operations 43

Consolidated Statements of Comprehensive Income 44

Consolidated Balance Sheets 45

Consolidated Statements of Changes in Equity 46

Consolidated Statements of Cash Flows 47

Notes to the Consolidated Financial Statements 48-81

Corporate Information 82

JONATHON J.L. KENNEDY | President and Chief Executive Officer

The contemporary media world is both rich and complex: for every opportunity, there is a corresponding challenge. As Glacier Media grows in both depth and breadth, it is scaling its portfolio across a “platform of principles” that allows its various business units to remain independent and entrepreneurial but take advantage of efficiencies of scale in terms of key business drivers such as technology innovation and diverse information channels. These principles have two key components: a complementary platform philosophy that focuses on content quality first and medium utility second – on this foundation the concepts of evolve, enrich and extend rest. Taken together, the complementary platform and “Triple E” provide Glacier staff at all levels a framework through which to create sustainable information products and services by focusing on innovation, sector service and excellence in product design, execution and delivery.

• sustain brand equity• define related platforms• expand market research• enhance products• solidify supply chain hold• evolve organization

• contextualize content• analyze content• interpret content• launch rich information

and data tools• heighten decision dependence

7A N N U A L R E P O R T

President’s Report

SummaryGlacier Media Inc. (“Glacier” or the “Company”) continued to generate strong revenue, profit and cash flow from operations through its diversified base of information communications businesses – and contin-ues to outperform many of its peers. The Company’s business and trade information operations continue to grow and provide attractive opportunities for future growth in both existing and new verticals through multi-platform offerings, including rich information products and solutions. Community media opera-tions continue to offer a strong value proposition through local information they provide to readers and key marketing channels they provide in the small community markets they serve across complemen-tary multi-media platforms. In 2012 weaker econom-ic conditions adversely affected national advertising revenues – a trend which appears to be largely cycli-cal, as national revenues were up significantly in 2011. Digital competition exacerbated the weaker economic conditions in the larger urban markets, but has been less of a factor in the smaller regional markets.

Given the significant growth opportunities available, the Company’s strategy is to invest cash flow gener-ated from the community media operations and the business and trade information operations in both operational opportunities and acquisitions. In partic-ular, the Company intends to increase capital allocat-ed to business and trade information acquisitions and growth opportunities. The Company also intends to provide returns to shareholders through increasing dividends as well as share buy-backs.

Key Financial HighlightsFor the year ended December 31, 2012, Glacier’s consol-idated revenue increased 23.4% to $330.0 million from $267.4 million in the prior year. This increase was the result of organic growth in a variety of opera-tions, the November 2011 acquisition of the Postmedia British Columbia community media assets, and the

• seek new audiences• seek new geographies• seek new content• seek new products• seek new supply chains

JONATHON J.L. KENNEDY

FINANCIAL HIGHLIGHTS

08 09 10 11 2012 08 09 10 11 2012 08 09 10 11 2012 08 09 10 11 2012 08 09 10 11 2012

44,782

30,456

39,074 44

,874

44,261 51

,822

35,792 43

,969 49,140

50,393

249,093

229,128

242,605

267,39

4 330,

016

0.56

0.38

0.48 0.55

0.56

0.48

0.33 0

.42 0.50

0.50

thousands of dollars (except share and per share amounts) IFRS 2012

IFRS 2011

IFRS 2010

CGAAP(3) 2009

CGAAP(3) 2008

Revenue $ 330,016 $ 267,394 $ 242,605 $ 229,128 $ 249,093

Gross profit $ 109,674 $ 99,376 $ 89,344 $ 82,179 $ 97,252

Gross margin 33.2% 37.2% 36.8% 35.9% 39.0%

EBITDA (1) $ 50,393 $ 49,140 $ 43,969 $ 35,792 $ 51,822

EBITDA margin (1) 15.3% 18.4% 18.1% 15.6% 20.8%

EBITDA per share (1) $ 0.56 $ 0.55 $ 0.48 $ 0.38 $ 0.56

Interest expense, net $ 6,074 $ 4,616 $ 6,223 $ 6,450 $ 9,100

Net income attributable to common shareholders beforenon-recurring items (1)(2) $ 18,481 $ 22,615 $ 18,993 $ 22,163 $ 34,963

Net income attributable to common shareholders beforenon-recurring items per share (1)(2) $ 0.21 $ 0.25 $ 0.21 $ 0.24 $ 0.38

Net income attributable to common shareholders $ 10,630 $ 25,731 $ 13,584 $ 13,926 $ 28,269

Net income attributable to common shareholders per share $ 0.12 $ 0.29 $ 0.15 $ 0.15 $ 0.30

Cash flow from operations (1)(2) $ 44,261 $ 44,874 $ 39,074 $ 30,456 $ 44,782

Cash flow from operations per share (1)(2) $ 0.50 $ 0.50 $ 0.42 $ 0.33 $ 0.48

Capital expenditures $ 16,872 $ 15,486 $ 8,400 $ 9,345 $ 9,483

Total assets $ 624,037 $ 591,756 $ 500,086 $ 503,747 $ 518,950

Debt net of cash outstanding before deferred financingcharges and other expenses $ 127,107 $ 131,413 $ 94,732 $ 99,939 $ 112,577

Equity attributable to common shareholders $ 348,015 $ 340,416 $ 328,575 $ 311,043 $ 297,517

Weighted average shares outstanding, net 89,357,465 89,991,561 92,023,970 92,721,210 93,131,183

Notes:

(1) Refer to “Non-IFRS Measures” section for calculation of non-IFRS measures used in this table.

(2) 2012 excludes $1.4 million of restructuring expense, $2.1 million of transaction and transition costs, $3.1 million of other income, $1.1 million gain on acquisition, $8.5 million impairment and $0.2 million loss on disposal of assets.

(3) The balances for 2009 and 2008 are presented under Canadian generally accepted accounting principles prior to the adoption of IFRS.

Cash Flow From OperationsThousands of dollars

EBITDAThousands of dollars

RevenueThousands of dollars

EBITDA Per ShareDollars

Cash Flow From Operations Per ShareDollars

A N N U A L R E P O R T9

acquisition of control of one of Glacier’s community media partnerships in April 2012.

• Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) grew 2.5% to $50.4 million – an increase of $1.3 million;

• Cash flow from operations (before changes in non-cash operating accounts and non-recurring items) decreased 1.4% to $44.3 million;

• Net income attributable to common shareholders before non-recurring items was $18.5 million compared to $22.6 million;

• EBITDA per share increased 3.3% to $0.56 from $0.55 for the year compared to the prior year and net income attributable to common shareholders before non-recurring items per share decreased to $0.21 from $0.25 for last year;

• Cash flow from operations (before changes in non-cash operating accounts and non-recurring items) per share remained consistent at $0.50 per share for the year ended December 31, 2012; and

• On a same-store basis, business and trade information revenue continued to show strong growth, while community media revenue was softer for the year compared to last year. Revenues and EBITDA in the community media operations were affected by weaker economic conditions and related national advertising softness. Consolidated EBITDA was also affected by operating resource expense investments made to strengthen some community media assets acquired from Postmedia, as well as operating expense investments made in a new digital real estate information business.

Business and Trade Information Sales Performance & ReviewGlacier’s business and trade information operations continued to deliver strong growth, with revenue increases generated across a wide variety of verticals – driven by a diverse variety of product and information innovations.

While some revenues have been adversely affected by economic conditions, a number of growth initiatives are being pursued and are generating strong sales results, especially those associated with sectors of the Canadi-an economy which are experiencing relatively stable conditions.

In particular, Glacier’s business and trade infor-mation operations enjoyed growth in the energy, agricultural, environmental risk, environmental compliance networks, medical and financial information sectors as a result of targeted initia-tives designed to align with growth areas within those sectors. Glacier’s business and trade information portfolio contains many brands that have decades of service in their respective sectors. The intrinsic equity associated with these brands is a key competitive advantage as the products evolve and extend.

In addition to core business and trade infor-mation print and digital sales, management is focused on strategies designed to offer customers increasingly richer value proposi-tions. These include multi-platform solutions – with a key focus on mobile offerings – designed to integrate more seamlessly with customer decision-making processes, thus ensuring heightened levels of decision depen-dency on specific information tools. Such dependence is enhanced through a focus on effective pricing and targeted timing. Conse-quently, these information tools are increas-ingly integrated in customer decision-making

The Business In Vancouver group’s mantra is simple and direct: to produce the best range of print and digital business information tools that match the city’s reputation as a world-class business centre.

and as a result sales efficiency, renewal and retention improves.

Key efforts are under way to distinguish differ-ent types of digital content, advertising and subscriptions based on research designed to highlight individual industry sector needs. Premium subscription and related products are being enhanced and developed with a particular focus on essential content, data, search, inter-pretation, contextualization and analytics. A consistent focus on various ways of enriching content results in improved rates for advertis-ing positioned alongside rich information.

In 2012, several initiatives highlighted how sharper focus on sector and customer needs facilitates efficient product development, ranging from tools for lead generation and data visualization to transaction facilitation and price discovery. This includes develop-ing new insights into opportunities related to various sectoral supply chains, particularly those related to natural resources industries.

These initiatives include:

• The Canadian Oilsands Navigator displays key upstream industry data on a web-based interface that permits users to geospatially reference and model important information such as capital spending and bitumen production.

• The Canadian Oilfield Service & Supply Database integrates new filtered search

and navigation technology to further heighten user utility and as a result, improves transactional functionality between buyers and sellers of oilfield products and services.

• Ecolog ERIS: Environmental Risk Information Service provides users with critical insights regarding potential hazardous risks related to commercial property development – and users can now map their findings in highly accurate GIS interfaces.

• Commodity News Service is a specialized agricultural commodity news and analysis service, based in Winnipeg, serving Canadian farmers and agribusinesses. It provides insight and analysis on important commodity prices such as grains, oilseed and pulse crops.

• Fundata offers a new series of risk indices which provide its customers with powerful tools for comparing performance and volatility between mutual funds with similar risk profiles.

• The Canadian Mining Journal now provides innovative and highly targeted lead generation product newsletters that provide advertisers with granular information regarding potential clients. Similar newsletters in other sectors are planned in 2013.

• National Buyer/Seller Forum is an important oilsands supply chain conference, based in Edmonton and Calgary, that links critical supply chain opportunities for Canadian and global companies. This forum is an important extension of the Company’s growing oilsands practice.

Management is paying close attention to key provincial and federal policy initiatives. Important developments in areas of energy and climate change, as well as international trade with Pacific Rim and European markets offer opportunity for new information products. As well, these markets offer new advertising frontiers for Canadian customers seeking to expand internationally. Such enhanced distri-bution highlights the quality and integrity

The JuneWarren-Nickle’s Energy Group delivers a

diverse range of research, data and rich information products for the country’s

upstream petroleum sector.

Its reputation as “Canada’s most

trusted source for energy information” is

well-deserved.


of Canadian goods and services, particular-ly when aligned with content that contextu-alizes Canada’s increasingly important role in a global economy. In 2012, key alignments were further developed with provincial and federal trade staffers in various embassies and consulates. Through these relationships various Glacier business and trade information products are available to trade and commercial officials whose responsibility it is to develop Canada’s business interests globally. For adver-tisers, framing their products and services in an economic development framework offers enhanced access to their marketing messages.

Senior business and trade information personnel are also “embedded” within key sectors in terms of representation on industry association boards and advisory groups. These roles permit senior management closer alignment with significant industry trends and developments.

Many of Glacier’s business and trade information units are located in key Western Canadian business centres. New organizational alignments between the units are resulting in innovative cross-sector marketing initiatives that help create new oppor-tunities for brand exposure, as well as new revenue streams in the west. Similar initiatives with the Company’s Toronto-based business units are resulting in new national opportunities.

Digital revenues now represent more than a quarter of Glacier’s business and trade informa-tion revenues and are growing steadily. Signifi-cant focus and related investment will continue to be made to enhance Glacier’s digital business and trade information verticals, through both organic development and new business acqui-sition. These acquisitions will be targeted to expand the markets that Glacier covers, extend the breadth of information products and marketing solutions provided, and to enrich Glacier’s digital media staff, technology and other relevant resources – all focused on consis-tently enhancing “decision dependence”.

Overall, the business and trade information operations and various markets offer attrac-tive opportunities for growth with high levels of profitability – particularly when aligned with Glacier’s dominance in key sectors.

Community Media Sales Performance & ReviewGlacier’s community media operations experienced weaker revenue performance in a number of markets, primarily the result of softer national advertising. The B.C. markets were affected by weaker economic conditions in Victoria, the Lower Mainland and a variety of Vancouver Island and Northern Interior markets. National advertising revenues were weaker in most markets, which appear to be the result of cautiousness due to prevailing economic conditions, as financial and govern-ment revenues have been significantly lower. Digital competition also affected national print spending levels, although this trend primarily affected larger urban markets. Local advertis-ing revenues were resilient in both the existing markets where Glacier has operated, and some of the Lower Mainland and Vancouver Island markets acquired from Postmedia – although the Victoria market continues to struggle.

Operating expense investments are being made to improve the strength and resources of the community media assets acquired from Postmedia in order to increase competitive-ness and sales effectiveness. The operations had been weakened by significant cost cutting – including sales capacity – incurred over many years under previous ownership due to high debt levels. Operating investments have been partially offset by savings in overhead costs as a result of operational alignments with

As Glacier Media’s largest area of information practice, agricultural is well represented through a comprehensive portfolio of long-serving brands that are constantly evolving to meet the needs of one of Canada’s most vital sectors.

Glacier’s existing infrastructure. While it will take time to strengthen and revitalize opera-tions, it is encouraging that direct revenue increases are being realized as investments are made. Digital investments are also being made to exploit revenue opportunities of the larger markets, with a specific focus on content delivery and advertising effectiveness.

While economic and market challenges have affected the community media operations, management believes that these businesses remain strong and will continue to generate solid cash flow given the nature of the markets in which Glacier operates. This cash flow can be used to fund growth through both internal investment and acquisition of digital business and trade information and digital communi-ty media assets, as well as debt repayments, dividend payments and share repurchases.

Glacier’s small market community media operations offer a unique selling proposition and competitive advantage through the local infor-mation that they provide – of which they are a primary source – and the primary advertising and marketing channels they offer. The value of community content is provided to readers in print and online, by tablet and smartphone platforms. As described above, a number of new digital sales products and strategies have been intro-duced, and new digital sales and product staff are being hired and technology investments are

being made to drive these growth initiatives. Given that the demand for local community information is expected to exist for the long term, Glacier expects to be able to monetize the information and marketing value. As 85% of Glacier’s local newspaper distribution is free, this also provides for a more durable reach of readership for advertisers over time wherein total market coverage can always be provid-ed. The attributes of these community media operations are significantly different and stronger than larger metropolitan paid daily newspapers, which have been reflected in the financial performance of Glacier’s commu-nity media group. An important advantage is that being local often means being integral-ly rooted in the fabric of a community and Glacier’s community media management and staff work assiduously to remain tied to the rhythms of the markets they serve.

Indeed, Glacier’s view aligns with that of Warren Buffett, whose Berkshire Hathaway now counts nearly 270 community media properties in its portfolio. Buffett focuses on the strong bond community media has with the markets served – and believes that bond provides the framework for a successful online future. In a note to his editors in 2012, Buffett outlined why community media of a certain size remains viable – as long as it remains tied to, and focused on, its community.

“Berkshire will probably purchase more papers in the next few years. We will favor towns and cities with a strong sense of community, comparable to the 26 in which we will soon operate. If a citizenry cares little about its community, it will eventually care little about its newspaper. In a very general way, strong interest in community affairs varies inversely with population size and directly with the number of years a communi-ty’s population has been in residence. There-fore, we will focus on small and mid-sized papers in long-established communities.”

Media commentator Jack Schafer notes Buffett “buys when he sees value others don’t.”

Glacier Media’s daily and weekly newspapers—

concentrated in Western Canada—all share one

thing in common: they are closely integrated into the

various communities in which they serve.

Glacier’s market leadership focus is on a

simple proposition: ensure a sense of community

ownership among readers and advertisers.

ROI | Nurturing a “Return on Information”Glacier’s complementary platform strategy is intended to keep its businesses oriented to a simple proposition: stay focused on quality content and the ways and means of delivering that content will follow in the opportunity context at hand. In a world filled with digital devices of all shapes and sizes, quality content and functionality—thus utility to the user—is often forgotten in the clamour of technological innovation and intense competition. Glacier’s complementary platform therefore scales to the opportunity: print can work with print; print with digital and digital with digital. Thus, rather than tilt at the windmills of “device dependence”, Glacier prefers to curate and nurture “decision dependence”—the notion that customer affinity to products and services is tied directly to the role quality content plays in their personal and professional lives.

Operational PerformanceAs stated, consolidated EBITDA increased $1.3 million or 2.5% to $50.4 million compared to $49.1 million in the prior year. While revenues showed a significant increase on an overall dollar basis due to acquisitions, the economic environment and related softness resulted in a lower EBITDA margin from these newly acquired operations and the commu-nity media operations in general. Despite the softness in the community media operations, consolidated EBITDA was ahead of last year due to the strength of the performance of the business and trade information operations.

Glacier’s consolidated EBITDA margin decreased to 15.3% for the year from 18.4% for last year as a result of softness in overall community media revenues and the lower margins of the Postmedia assets. Manage-ment will seek to improve these margins and profit performance through improved print and digital sales effectiveness, cost efficiency and other initiatives.

Cost reduction measures continue to be implemented consistent with management’s strategy of maintaining strong product and editorial quality while reducing operat-ing costs where possible through initiatives that do not impact quality, sales capacity or market and competitive positions. Manage-ment is being careful to maintain appropriate levels of resources in staff and technology as well as business development in order to facil-itate long-term revenue growth.

EBITDA was also impacted by increased operating infrastructure investment made in digital media management, staff, information technology and related resources, as well as other content and quality related areas. The increase in Glacier’s consolidated revenue has both allowed this investment to be made and has been in part a result of the digital

investments already made. These investments were made consistent with Glacier’s comple-mentary media platform and product strategy and business and trade information strategies.

The complementary media platform and product strategy addresses both the risks that digital media represents to the traditional print platform and the opportunities digital media offers in Glacier’s local community and business and trade information markets. The strategy’s premise is that customer utility and value should drive platform utilization and product design and functionality. Online, mobile, tablet and other information deliv-ery devices will be fully utilized, while print content and design quality will also be fully maintained. While digital platforms offer many attractive new opportunities, print platforms continue to offer effective utility to both readers and advertisers. Maintaining strong print products also maintains strong brand image and awareness, which increas-es the likelihood of success online. Studies of time spent across media platforms and reader satisfaction support the complementary platform and product strategy. Management expects that customer utility will vary over time and will be affected by what Glacier and other media providers can creatively provide. Management believes the complementary platform and product strategy will be prudent for the foreseeable future, and will maximize revenue and profit generation.

As indicated, the business and trade infor-mation strategies are focused on increas-ing the value provided to customers through richer content, data and analytic value and heightening customer decision dependence of Glacier’s products and services. This depen-dence moves Glacier’s products and services further up the value ladder, with the higher revenue, profitability and recurring cash flow that this value proposition provides.


Financial PositionGlacier’s consolidated debt net of cash outstanding before deferred financing charges and other expenses was 2.47x trailing 12 months EBITDA (normalized for the acqui-sition of control of one of Glacier’s commu-nity media partnerships) as at December 31, 2012. The Company repaid $25.2 million of debt during the year and incurred $17.0 million of additional borrowings consisting of $12.6 million from the acquisition of control of ANGLP and $4.4 million of borrowing related to its 50% interest in Great West Newspapers Limited Partnership (“GWNLP”) for the construction of its new printing facil-ities. Glacier’s consolidated debt net of cash outstanding before deferred financing charges was $127.1 million as at December 31, 2012.

Glacier invested $16.9 million of capital expenditures during the year primarily on press facility construction and expan-sion to accommodate new press equipment, additional production equipment, information technology infrastructure and software. $14.5 million of these capital expenditures were investment capital expenditures, the major-ity of which relate to the building and instal-lation of a new press facility that is expected to be completed in 2013. The investment will result in lower operating costs, better quality, and new long-term contract-based revenues (specifically, Glacier’s joint venture opera-tion, GWNLP, which has secured a contract to print the Edmonton Journal commencing in the third quarter of 2013). The investment capital expenditures are being made to gener-ate direct revenue and cash flow improvements and payback consistent with Glacier’s target-ed return on investment, as well as quality improvements and other benefits.

In March 2013, an affiliate of the Company received correspondence from Canada Revenue Agency (“CRA”) proposing to issue

a notice of reassessment with respect to the utilization of non-capital losses by the affili-ate, pertaining to taxation years 2008 to 2011. The Company believes that it has reported its tax position appropriately and believes the Company’s affiliate has substantial defences to the matters raised by the CRA; however, should the proposed reassessment by CRA ultimately be upheld against the Company’s affiliate, the resulting payment would materi-ally affect the Company’s financial state-ments and cash flows. Notwithstanding, the Company’s affiliate has the financial capacity to pay such amounts, if any. The likely timing to resolve this matter may take years.

Glacier invested $16.9 million of capital expenditures during the year, primarily on press facility construction and expansion to accommodate new press equipment, additional production equipment, information technology infrastructure and software.

Outlook and Summary

While economic conditions have impact-ed some community media operations and business and trade information verticals, and digital competition is stronger in the larger community media markets, management expects that growth will continue in Glacier’s business and trade information operations, as well as a variety of community media markets where local market conditions are stronger. In this regard, management will continue to closely monitor economic conditions in various markets and verticals to ensure appropriate decisions are made in a timely fashion.

Management will focus in the short term on a balance of paying down debt, integrating the operations acquired, enhancing existing operations, targeting select acquisition oppor-tunities and returning value to shareholders.

Given strong cash flows resulting from operations and acquisitions as indicated, an increasing portion of cash generated can also be returned to shareholders through increased dividends. In January 2013, the Board of Direc-tors reviewed the Company’s dividend policy and announced a 33% increase in the annual dividend to $0.08 from $0.06 per share – to be paid quarterly instead of semi-annually.

As indicated, significant focus and related investment will continue to be made to enhance Glacier’s business and trade information verticals, through both organic development and acquisition. These acquisitions will be targeted to expand markets that Glacier covers; expand the breadth of information products and marketing solutions; and expand Glacier’s digital media staff, technology and related resources.

Management will continue to seek a balance of maintaining debt at manageable levels and delivering growth through both operations and acquisitions. In particular, management will seek to time investment in the acquisition and organic growth opportunities to allow cash flow from operations to be used to pay down the increased borrowings incurred in the fourth quarter of 2011.

As always, thanks are due to the entire manage-ment and staff at Glacier and our partnerships for the effort and performance they delivered during the year, for the long hours worked and the creativity engendered to generate the results achieved.

Glacier’s Board of Directors continued to play an integral role in the oversight of the Company, providing valuable counsel, practi-cal experience and a steady long-term view through challenging conditions. I thank them on behalf of myself and our shareholders for these efforts.

Jonathon J.L. Kennedy President and Chief Executive Officer


MANAGEMENTDISCUSSION

& ANALYSISGlacier Media continues to earn its reputation as one of Canada’s leading information and communications services companies. It consistently outperforms its peer group across a broad range of financial and market metrics for one key reason: a powerful combination of great people, great products and great performance.

Forward Looking StatementsIn this MD&A, Glacier Media Inc. and its subsid-iaries are referred to collectively as “Glacier”, “us”, “our”, “we” or the “Company” unless the context requires otherwise.

The information in this report is as at March 27, 2013.

Glacier Media Inc.’s 2012 Annual Report, includ-ing this MD&A, contains forward-looking state-ments that relate to, among other things, our objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates and can generally be identified by the use of statements that include phrases such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “likely”, “will”, “may”, “could”, “should”, “would”, “suspect”, “outlook”, “estimate”, “forecast”, “objective”, “continue” (or the negative thereof) or similar words or phrases. These forward-looking state-ments include, among other things, statements under the headings “Significant Developments in 2012 and Outlook” and “Annual Results and Overview of Operating Performance” and the headings “Business and Trade Information Sales Performance & Review”, “Community Media Sales Performance & Review”, “Opera-tional Performance”, “Financial Position” and “Outlook and Summary” in the accompanying President’s Message, and statements relating to our expectations regarding our revenues, expens-es, cash flows and future profitability, includ-ing our expectations that growth will continue in a number of Glacier’s business segments, our expectations as to organic revenue and profitabil-ity growth, to generate sufficient cash flow from operations to meet anticipated working capital, capital expenditures and debt service require-ments, to monetize our information and content, that profitability will be impacted by general softness in community media and advertising, that

debt will be maintained at manageable levels, that cost savings will be realized, that annual dividends are expected to be declared, and that the Company expects to repurchase shares.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, such statements are based on certain assumptions, including contin-ued economic growth and recovery and those assumptions described under the headings “Significant Developments in 2012 and Outlook” and “Annual Results and Overview of Operat-ing Performance” and the headings “Business and Trade Information Sales Performance & Review”, “Community Media Sales Performance & Review”, “Operational Performance”, “Finan-cial Position” and “Outlook and Summary” in the accompanying President’s Message, and are subject to risks, uncertainties and other factors which may cause results, performance or achievements of the Company to be materi-ally different from any future results, perfor-mance or achievements expressed or implied by such forward-looking statements, and undue reliance should not be placed on such state-ments. Important factors that could cause actual results to differ materially from these expec-tations are listed in our annual MD&A under the heading “Business Environment and Risks” and in our Annual Information Form under the heading “Risk Factors”, many of which are out of our control. These factors include, but are not limited to, the ability of the Company to sell advertising and subscriptions related to its publications, foreign exchange rate fluctuations, the seasonal and cyclical nature of the agricul-tural industry, discontinuation of the Depart-ment of Canadian Heritage’s Canada Periodical Fund, general market conditions in both Canada and the United States, changes in the prices of purchased supplies including newsprint,

2012 Management’s Discussion and Analysis (“MD&A”)


the effects of competition in the Company’s markets, dependence on key personnel, integra-tion of newly acquired businesses, technological changes, and financing and debt service risk.

The forward-looking statements made in the Company’s Annual Report, including this MD&A, relate only to events or information as of the date on which the statements are made in the report and this MD&A. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-look-ing statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

The Annual Report and this MD&A and the documents to which we refer herein should be read completely and with the understanding that our actual future results may be materially different from what we expect.

Basis of Discussion and AnalysisThe following management discussion and analysis of the financial condition and results of operations of the Company and other informa-tion is dated as at March 27, 2013 and should be read in conjunction with the Company’s annual consolidated financial statements and notes thereto as at and for the year ended Decem-ber 31, 2012. These annual consolidated finan-cial statements have been prepared in accor-dance with International Financial Reporting Standards (“IFRS”) as issued by the Interna-tional Accounting Standards Board (“IASB”).

Non-IFRS MeasuresEarnings before interest, taxes, depreciation and amortization, (“EBITDA”), EBITDA margin, EBITDA per share, cash flow from operations, cash flow from operations per share, net income attributable to common shareholders before non-recurring items and net income attribut-able to common shareholders before non-recur-ring items per share are not generally accepted measures of financial performance under IFRS. Management utilizes these financial perfor-mance measures to assess profitability and return on equity in its decision making. In addition,

biLL wHiTELAw | Executive Vice-President, business information

Glacier offers business information products and services for nearly 20 different sectors of the Canadian economy. Our goal in each sector—whether it is energy, mining or agriculture—is to be the first choice for customers seeking the types of information they need to drive their businesses forward. That means we have to be first in terms of quality, timing and price to create mutually beneficial decision dependence for our customers.

the Company and its lenders and investors use EBITDA to measure performance and value for various purposes. Investors are cautioned, however, that EBITDA should not be construed as an alternative to net income attributable to common shareholders determined in accordance with IFRS as an indicator of the Company’s performance. The Company’s method of calcu-lating these financial performance measures may differ from other companies and, accord-ingly, they may not be comparable to measures used by other companies. A quantitative recon-ciliation of these Non-IFRS measures is includ-ed in the section entitled EBITDA, Cash Flow from Operations and Net Income Attributable to Common Shareholders before Non-recurring Items Reconciliation in this MD&A.

All financial references are in millions of Canadian dollars unless otherwise noted.

Overview of the BusinessGlacier Media Inc. is an information commu-nications company focused on the provision of primary and essential information and related services through print, electronic and online media. Glacier is pursuing this strategy through its core business segments: the communi-ty media, trade information and business and professional information sectors.

The operations in the community media and trade information group include the agricultur-al information group (which includes Western Producer Publications, Farm Business Commu-nications and Canada’s Outdoor Farm Show), the JuneWarren-Nickle’s Energy Group, the Business in Vancouver Media Group, the Business Information Group and the Glacier community media group, which includes direct, joint venture and other interests in community and local daily newspapers and related publica-tions, websites and digital products in British

Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec and Rhode Island.

Glacier’s operations in the business and profes-sional information group include Specialty Technical Publishers, CD-Pharma, EcoLog, and a 50% joint venture interest in Fundata.

For additional information on Glacier’s opera-tions see the Company’s Annual Information Form as filed on SEDAR (www.sedar.com).

Significant Developments in 2012 and OutlookGrowth in revenues in the year ended December 31, 2012 was the result of organic growth in a number of Glacier’s trade information and business and professional operations, the November 2011 acquisition of the Postmedia British Colum-bia community media assets, and the acquisi-tion of control of Alta Newspaper Group Limited Partnership (“ANGLP”) in April 2012. Revenue growth came from both print and digital media sources, and is directly attributable to Glacier’s operational, business segment and complemen-tary media platform and product strategies. New revenues were generated in a wide variety of areas including online, mobile, tablet, electron-ic product and lead generation developments, special publishing initiatives, special features, supplements, new community magazines, production and promotion of community events, custom publishing, sponsored industry specific research studies, educational offerings, confer-ences and trade shows, new directories, and a number of other initiatives. Efforts continue to be made to leverage and monetize content across channels and platforms, particularly mobile applications. Efforts are also being made to improve inter-divisional marketing and branding collaboration to create new organic growth and market opportunities.


Management expects that growth will contin-ue in a number of Glacier’s various business segments. While economic conditions have remained strong across many of Glacier’s verti-cals including energy, agriculture, environmen-tal risk, environmental compliance networks, medical and financial information, revenue continues to be softer in the urban markets of the newly acquired assets from Postme-dia and community media in general. In 2012, weaker economic conditions adversely affect-ed national revenues – a trend which appears to be largely cyclical, as national revenues were up significantly in 2011. Digital competition exacerbated the weaker economic conditions in the larger urban markets, but has been less of a factor in the smaller regional markets. Custom-er demand for Glacier’s electronic information and other digital products continues to grow.

The softness in community media revenues combined with operating investments in the Company’s recently acquired community media assets has resulted in lower operating results for the year. Cost reduction measures continue to be implemented consistent with management’s strategy of maintaining strong product and editorial quality while reducing operating costs where possible through initia-tives that do not impact quality, sales capacity or market and competitive positions. Manage-ment is being careful to maintain appropriate levels of resources in staff and technology as well as business development in order to facil-itate long-term revenue growth.

Despite the current community media softness, significant growth opportunities are available to Glacier in a variety of business segments. Consequently, the Company’s strategy is to invest cash flow generated from the community media operations and the business information operations in both operational opportunities

and acquisitions. In particular, the Company intends to increase capital allocated to business information acquisitions and growth opportu-nities. The Company also intends to provide returns to shareholders through increasing dividends as well as share buybacks.

Operational PerformanceRevenue for 2012 was 23.4% higher than revenue in 2011. The growth in revenue came from i) organic growth in our business and professional and trade information opera-tions, ii) the acquisition of community media assets from Postmedia in November 2011, iii) the acquisition of control of Alta Newspaper Group Limited Partnership in April 2012, iv) the acquisition of Canada’s Outdoor Farm Show in November 2011, and v) other small acquisitions completed in 2011 and 2012.

EBITDA increased 2.5% to $50.4 million for 2012 from $49.1 million in 2011. The organic revenue growth in trade information and business and professional information operations, a contin-ued focus on operational costs in the Company’s existing operations, and the ANGLP acquisition of control on April 1, 2012 contributed to incre-mental EBITDA growth for the year. These gains were offset by softness in Glacier’s commu-nity media operations and the newly acquired Postmedia community publications in partic-ular. The Company made operating resource expense investments to strengthen the commu-nity media assets acquired from Postmedia, as well as operating expense investments made in a new digital real estate information business, which impacted operating results for the year.

Annual Results and Overview of Operating Performance

Selected Annual InformationThe following outlines selected financial statistics and performance measures for Glacier for the years ended December 31, 2012, 2011 and 2010:

thousands of dollars (except share and per share amounts) 2012 2011 2010

Revenue $ 330,016 $ 267,394 $ 242,605 Gross profit (3) $ 109,674 $ 99,376 $ 89,344 Gross margin 33.2% 37.2% 36.8%EBITDA (1) $ 50,393 $ 49,140 $ 43,969 EBITDA margin (1) 15.3% 18.4% 18.1% EBITDA per share (1) $ 0.56 $ 0.55 $ 0.48 Interest expense, net $ 6,074 $ 4,616 $ 6,223 Net income attributable to common shareholders before non-recurring items (1)(2)(4) $ 18,481 $ 22,615 $ 18,993 Net income attributable to common shareholder before non-recurring items per share (1)(2)(4) $ 0.21 $ 0.25 $ 0.21 Net income attributable to common shareholders (6) $ 10,630 $ 25,731 $ 13,584 Net income attributable to common shareholders per share (6) $ 0.12 $ 0.29 $ 0.15 Cash flow from operations (1)(2)(4) $ 44,261 $ 44,874 $ 39,074 Cash flow from operations per share (1)(2)(4) $ 0.50 $ 0.50 $ 0.42 Investment capital expenditures $ 14,504 $ 10,703 $ 4,492 Sustaining capital expenditures $ 2,368 $ 4,783 $ 3,908 Total assets $ 624,037 $ 591,756 $ 500,086 Total non-current financial liabilities $ 119,599 $ 131,132 $ 85,949 Debt net of cash outstanding before deferred financing charges and other expenses $ 127,107 $ 131,413 $ 94,732 Equity attributable to common shareholders $ 348,015 $ 340,416 $ 328,575 Dividends paid (5) $ 5,362 $ 2,681 $ –Dividends paid per share (5) $ 0.06 $ 0.03 $ –Weighted average shares outstanding, net 89,357,465 89,991,561 92,023,970

Notes:



(3) Gross profit for these purposes excludes depreciation and amortization.

(4) For non-recurring items excluded in the prior period, refer to previously reported financial statements.

(5) Glacier commenced paying semi-annual dividends in 2011. The year ended December 31, 2011 represents only one dividend payment.

(6) 2011 includes a $15.1 million one-time gain within an associate entity.

The main factors affecting the comparability of the results over the last two years are:

• Operating performance of the Company’s various business units and general market conditions during the reported periods;

• The acquisitions made during 2012 and 2011, including the acquisition of community media assets from Postmedia late in 2011;

• The additional revenues and expenses, and a one-time gain included in the Company’s results in 2012 due to the acquisition of control of ANGLP;

• A one-time gain in earnings from associates of $15.1 million in 2011;

• Restructuring expenses including severance payments and transition costs for new acquisitions;

• A one-time other income amount in 2012 of $3.1 million; and

• The seasonal nature of certain of Glacier’s businesses.


RevenueGlacier’s consolidated revenue for the year ended December 31, 2012 was $330.0 million compared to $267.4 million in the prior year.

Community Media and Trade InformationThe community media and trade information group generated $314.3 million of revenue for the year ended December 31, 2012, as compared to $253.1 million last year. The increase in revenue during the year compared to the prior year was the result of i) organic growth in trade informa-tion operations, ii) the Postmedia acquisition late in 2011 which resulted in a significant increase in revenues within the community media and trade information segment, iii) the acquisition of control of ANGLP in the spring of 2012 which results in incremental revenues, iv) the Canada’s Outdoor Farm Show acquisition in the fall of 2011, and v) several other small acquisitions completed in 2011 and 2012.

Energy, agriculture, and many of Glacier’s other business and trade verticals also continued to experience revenue growth and profitability. Glacier’s community media operations experi-enced a general softness in revenues throughout its various markets, particularly in national adver-tising, resulting in a same store revenue decrease in Glacier’s existing community media markets as well as those acquired from Postmedia in late 2011. A wide array of digital media initiatives resulted in growth in online and digital revenues.

Business and Professional InformationThe business and professional group (which includes Specialty Technical Publishers, CD-Pharma, EcoLog and a 50% joint venture interest in Fundata) generated revenues of $15.7 million for the year ended December 31, 2012, as compared to $14.3 million last year. Both the Company’s mutual fund information business and Canadian environmental health and safety information business showed strong growth during the year ended December 31, 2012 in comparison to the prior year. Specialty Technical Publishers revenues were down in 2012 compared to the prior year due to shifting consumer prefer-ences for online or digital format of their products from hardcopy or disk. STP is aggressively shift-ing its focus to meet the new online or digital

format demand from customers and is gener-ating growth in digital network sales. Glacier’s interactive medical education business generated increased revenues for the year as compared to the prior year, primarily as a result of new tablet based medical education products.

Gross ProfitGlacier’s consolidated gross profit, being revenues less direct expenses, for the year ended December 31, 2012 was $109.7 million compared to $99.4 million last year. The increase in gross profit is largely attributable to revenue increas-es and strong contribution from organic growth in the Company’s trade information businesses and business and professional operations, the acquisition of control of ANGLP, the acquisition of Canada’s Outdoor Farm Show, partially offset by annual salary and wage increases and revenue softness in our community media operations.

Gross profit as a percentage of revenues (“gross profit margin”) for the year ended December 31, 2012 decreased to 33.2% compared to 37.2% in 2011 primarily as a result of lower gross margin contributed from the Postmedia acquisition and the softness in community media revenues in general. The Company also incurred operat-ing resource expense investments made to strengthen the Postmedia community media assets acquired as well as operating expense investments made in a new digital real estate information business, which contributed to the lower margin for the year. The Company is in the process of implementing significant sales effec-tiveness and cost efficiency initiatives related to the newly acquired assets and community media operations in general that are intended to improve the operating margin going forward.

General & Administrative ExpensesGlacier’s consolidated general and administra-tive expenses were $59.3 million for the year ended December 31, 2012 as compared to $50.2 million in the prior year. The increase was due to i) the acquisition of newspaper publications from Postmedia in late 2011, ii) the acquisition of control of ANGLP, iii) acquisition of Canada’s Outdoor Farm Show, iv) increased expenses associated with the Company’s digital opera-tions and v) annual salary and wage increases.

EBITDAEBITDA was $50.4 million for the year ended December 31, 2012 as compared to $49.1 million in the prior year. The increase in EBITDA was due to the reasons stated under Revenue, Gross Profit and General & Administrative Expenses.

Net Interest ExpenseGlacier’s consolidated net interest expense for the year ended December 31, 2012 was $6.1 million as compared to $4.6 million in the prior year, an increase of $1.5 million. The increase in net interest expense reflects the increased borrow-ings in connection with the Postmedia acquisi-tion on November 30, 2011, additional borrowing related to construction of new facilities at our joint venture operation Great West Newspapers Limited Partnership (“GWNLP”) and the ANGLP

acquisition of control on April 1, 2012. These increases were offset by debt repayments in 2012.

Depreciation and AmortizationDepreciation of property, plant and equipment for the year ended December 31, 2012 increased $0.9 million as compared to the prior year primarily as a result of the additional assets from the Postmedia acquisition in 2011 and the ANGLP acquisition of control in April 2012. Amorti-zation of intangible and other assets increased $0.9 million for the year ended December 31, 2012 as compared to the prior year as a result of investments in software and business acquisi-tions that occurred during the fourth quarter of 2011 and second quarter of 2012.

Other Income The Company recognized $3.7 million of other income during the year ended December 31, 2012, of which $3.1 million related to the redemption of miscellaneous asset-backed paper investments received in connection with an affiliated entity’s participation in the $6.3 million 2008 settlement between Sun Times Media Group and CanWest Global Communications Inc. The Company’s participation in the settlement was previous-ly reported in our December 31, 2008 financial statements. The carrying value of these invest-ments was $ nil. The Company does not have any other such investments.

Gain on AcquisitionOn April 1, 2012, the Company acquired control of its joint venture partner Alta Newspaper Group Limited Partnership (“ANGLP”). The consideration paid is equal to the net carry-ing value of the Company’s interest in ANGLP immediately prior to the acquisition of control

bOb wiLLCOx | President, Glacier Agricultural Media

Canada’s role as a global agricultural leader is in many ways a function of the quality of information used by farmers and agri-business companies and organizations. Through our portfolio, we create information links between farmers and their suppliers—and farmers and their customers. Agriculture is driven by technological innovation and our information tools move in innovative tandem with key changes in Canada’s fields and farmyards.


including net working capital, property plant and equipment, intangible assets, goodwill, and long term debt. Non-controlling interest was valued at the minority shareholders percentage of the net assets of ANGLP on April 1, 2012. As a result, the Company recognized a gain on the acquisition of $1.1 million.

Impairment ExpenseFor the year ended December 31, 2012, the Company recorded an $8.5 million impairment of goodwill and intangible assets compared to $9.2 million in the prior year. The amount represents $6.8 million in total goodwill impair-ments primarily within the BC Newspaper group and the Business and Professional group of cash generating units (“CGU”) and $1.7 million of intangible asset impairments primar-ily within the BC Newspaper group of CGUs. The 2011 amount represents $0.9 million of total goodwill impairments primarily in the BC Newspaper group of CGUs, and $7.9 million of intangible assets impairments primarily within the Business and Professional group of CGUs. Impairment expense also included $0.4 million impairment on certain press equipment sched-uled for replacement.

Other Expenses Other expenses for the year ended December 31, 2012 increased by $0.5 million compared to the prior year. Other expenses includes restructur-ing costs, acquisition transaction and transition costs, stock based compensation costs, foreign exchange, gains or losses on disposal of assets and gains or losses on the change in fair value of derivative financial instruments.

Earnings from AssociatesEarnings from associates which include the Company’s share of Continental Newspapers Ltd. (“Continental”), certain assets acquired from Postmedia in November 2011 and InfoMine Inc. (“InfoMine”), decreased $16.0 million as compared to the prior year. Included in the prior year is the Company’s $15.1 million share of a one-time gain of $25.7 million relating to recog-

nition of tax assets within one of the Company’s associates. Earnings from associates were also impacted by softer community media operations.

Net Income Attributable to Common ShareholdersNet income attributable to common shareholders decreased by $15.1 million compared to 2011. The change resulted from i) increased operating results, ii) other income of $3.7 million, iii) a gain on acqui-sition of $1.1 million related to the acquisition of control of ANGLP, iv) lower impairment expense of $0.6 million and v) decreased tax expense of $0.3 million. These increases were offset by i) higher interest costs of $1.5 million, ii) higher amortiza-tion and depreciation of $1.8 million, iii) higher non-controlling interests of $2.3 million, iv) lower earnings from associates of $16.0 million due to a one-time gain of $15.1 million in the prior year and v) increased other expenses of $0.5 million.

Cash Flow from OperationsGlacier’s consolidated cash flow from operations decreased to $44.3 million (before changes in non-cash operating accounts and non-recurring items) for the year ended December 31, 2012 from $44.9 million last year. The decrease in cash flow from operations is primarily due to increased operating results for the year as stated under Revenue, Gross Profit, General & Administrative Expenses and EBITDA, offset by higher interest expense from acquisitions.

Management believes that cash flow from operations before changes in non-cash operat-ing accounts (see Consolidated Statements of Cash Flows) is the most appropriate measure to determine Glacier’s profitability and return on equity, as the Company has low ongoing sustain-ing capital expenditures and amortization largely relates to intangible assets and does not repre-sent a corresponding ongoing sustaining capital expense. Management also monitors free cash flow (being cash flow from operations net of capital expenditures, debt service and investment in working capital) closely to measure ongoing overall cash flow strength.

Capital expenditures were $16.9 million for the year ended December 31, 2012 compared to $15.5 million in the prior year. $14.5 million of these capital expenditures were investment capital expenditures, the majority of which relate to the building and installation of a new press facility that is expected to be completed in 2013. These invest-ment capital expenditures are expected to result in attractive direct revenues and cash flow improve-ments and payback consistent with Glacier’s targeted return on investment. Sustaining capital expenditures for the year were $2.4 million.

See “Summary of Financial Position, Financial Requirements and Liquidity” for further details.

Related party transactionsDuring the year ended December 31, 2012, the Company and its affiliates recorded administra-tion, consulting, and interest expenses of $2.5 million (2011: $1.7 million) from Madison Venture Corporation (“Madison”) and its subsidiaries. Madison is a minority shareholder of the Company and certain of its officers and directors are officers and directors of the Company. Madison provides strategic, financial, transactional advisory services and administrative services to Glacier on an ongoing basis. This has been done with the intention of maintaining an efficient and cost effective corporate overhead structure, instead of i) hiring more full-time corporate and adminis-trative staff and thereby increasing fixed overhead costs and ii) retaining outside professional adviso-ry firms on a more extensive basis. These services were provided in the normal course of operations and were measured at the exchange amount, which represented the amount of consideration established and agreed to by the related parties. Included in trade payables at December 31, 2012 was $ nil due to Madison (2011: $0.4 million).

At December 31, 2012, the Company had amounts due to InfoMine of $1.6 million (2011: $3.2 million) from deferred payments related to the acquisition of the Company’s 50% interest in InfoMine. These amounts have no interest and are due on demand except for $0.5 million which is due November 10, 2013.

At December 31, 2012, the Company had amounts due from an associated private holding company of $2.7 million (2011: $0.6 million) for non-op-erating amounts related to the initial acquisition and integration of the related company. These amounts are non-interest bearing and have no fixed terms of repayment.

Subsequent eventIn March 2013, an affiliate of the Company received correspondence from Canada Revenue Agency (“CRA”) proposing to issue a notice of reassessment with respect to the utilization of non-capital losses by the affiliate, pertaining to taxation years 2008, 2009, 2010 and 2011. The Company believes that it has reported its tax position appropriately. No provision has been made in these financial statements for additional income taxes, if any, which may be determined to be payable on ultimate resolution of this matter. Should CRA issue the notice of reassessment, the Company’s affiliate would be obligated to pay an initial payment of fifty percent of the reassessed tax amount plus penalties and interest, in conjunction with appealing the reassessment. The Company believes its affiliate has substantial defences in response to the matters raised by CRA and would vigorously appeal any reassessment. Nevertheless, the initial payment upon appeal, as well as, the proposed reassessment by CRA, if upheld, would have a material impact on the Company’s financial statements and cash flows. Notwithstanding, the Company’s affiliate has the financial capacity to pay such amounts, if any. The likely timing to resolve this matter may take years.


RevenueGlacier’s consolidated revenue for the quarter ended December 31, 2012 was $84.0 million compared to $73.0 million in the same period last year.

The 15.0% increase in consolidated revenue during the fourth quarter compared to last year was primarily the result of the acquisition of control of ANGLP in April 2012 and a full quarter of revenue from the Postmedia acquisition on November 30, 2011.

In a number of the Company’s markets fourth quarter results showed improvements over the same period in the prior year and are reflective of overall operating improvements that took place during 2012. In particular, the environmental, financial, agriculture, medical, mining and other business and trade information areas continued to deliver growth.

Community media continued softness in the fourth quarter of 2012 in some of Glacier’s markets due primarily to softer national adver-tising. It appears that the global economic uncer-tainty has resulted in cautiousness amongst some national and other advertisers, although local advertising has generally held up well.

Gross ProfitGlacier’s consolidated gross profit for the three months ended December 31, 2012 was $27.2 million compared to $26.3 million in the same period last year. The absolute dollar increase in gross profit is largely attributable to revenue increases and related direct contribution.

General & Administrative ExpensesGlacier’s consolidated general and administra-tive expenses were $14.7 million for the three months ended December 31, 2012 as compared to $13.8 million in the same period in the prior year. The increase was due to increases in costs for the Company’s digital operations, annual salary and wage increases, the acquisition of control

of ANGLP in April 2012 and additional costs for a full quarter of operations for the Postmedia assets acquired in November 2011.

EBITDAConsolidated EBITDA remained consistent at $12.6 million for the fourth quarter of 2012 and 2011. The consistency in EBITDA was due to the reasons stated under Revenue, Gross Profit and General & Administrative Expenses.

Net Income attributable to common shareholdersNet income attributable to common sharehold-ers decreased $17.2 million in the fourth quarter of 2012 to a loss of $5.0 million compared to income of $12.2 million in the fourth quarter of 2011. This decrease was caused by i) increased interest expense of $0.5 million, ii) increased depreciation and amortization of $1.1 million, iii) increased impairment expense of $0.1 million, iv) decreased earnings from associates of $15.2 million due to a one-time gain of $15.1 million in the prior year, v) increased non-controlling inter-ests of $0.9 million, and vi) other expense of $0.6 million. These decreases were partially offset by i) an increase to other income of $0.6 million and ii) decreased income tax expense of $0.6 million.

Cash Flow from operationsGlacier’s consolidated cash flow from operations was $11.5 million (before changes in non-cash working capital and non-recurring items) for the three month period ended December 31, 2012 compared to $11.2 million for the same period last year. The increase in cash flow from operations was primarily a result of the reasons described under Revenue, Gross Profit and General & Administrative Expenses.

See “Summary of Financial Position, Financial Requirements and Liquidity” for further details.

Fourth Quarter Results and Overview of Operating Performance

Summary of Selected Quarterly Results The following outlines the significant financial performance measures for Glacier for the last eight quarters:

thousands of dollars (except share and per share amounts)

Trailing 12 Months

Q42012

Q32012

Q22012

Q12012

Revenue $ 330,016 $ 83,962 $ 78,245 $ 91,388 $ 76,421 EBITDA (1) $ 50,393 $ 12,570 $ 9,815 $ 17,130 $ 10,878 EBITDA margin (1) 15.3% 15.0% 12.5% 18.7% 14.2%EBITDA per share (1) $ 0.56 $ 0.14 $ 0.11 $ 0.19 $ 0.12 Interest expense, net $ 6,074 $ 1,586 $ 1,304 $ 1,607 $ 1,577 Net income attributable to common shareholders before non-recurring items (1)(2)(3) $ 18,481 $ 5,058 $ 3,302 $ 6,444 $ 3,677

Net income attributable to common shareholdersbefore non-recurring items per share (1)(2)(3) $ 0.21 $ 0.06 $ 0.04 $ 0.07 $ 0.04

Net income attributable to common shareholders $ 10,630 $ (5,015) $ 5,630 $ 6,892 $ 3,123 Net income attributable to common shareholders per share $ 0.12 $ (0.06) $ 0.06 $ 0.08 $ 0.03

Cash flow from operations (1)(2)(3) $ 44,261 $ 11,536 $ 7,934 $ 15,360 $ 9,431 Cash flow from operations per share (1)(2)(3) $ 0.50 $ 0.13 $ 0.09 $ 0.17 $ 0.11 Capital expenditures $ 16,872 $ 4,341 $ 2,667 $ 6,890 $ 2,974 Debt net of cash outstanding before deferredfinancing charges and other expenses $ 127,107 $ 127,107 $ 131,482 $ 137,003 $ 127,182

Equity attributable to common shareholders $ 348,015 $ 348,015 $ 351,219 $ 347,229 $ 343,822 Weighted average shares outstanding, net 89,357,465 89,354,650 89,358,410 89,358,410 89,358,410

Trailing 12 Months

Q42011

Q32011

Q22011

Q12011

Revenue $ 267,394 $ 73,019 $ 61,955 $ 71,712 $ 60,708 EBITDA (1) $ 49,140 $ 12,555 $ 10,572 $ 15,281 $ 10,732 EBITDA margin (1) 18.4% 17.2% 17.1% 21.3% 17.7%EBITDA per share (1) $ 0.55 $ 0.14 $ 0.12 $ 0.17 $ 0.12 Interest expense, net $ 4,616 $ 1,028 $ 1,002 $ 1,278 $ 1,308 Net income attributable to common shareholders before non-recurring items (1)(3) $ 22,615 $ 6,633 $ 4,211 $ 7,930 $ 3,840

Net income attributable to common shareholdersbefore non-recurring items per share (1)(3) $ 0.25 $ 0.07 $ 0.05 $ 0.09 $ 0.04

Net income attributable to common shareholders (4) $ 25,731 $ 12,221 $ 3,721 $ 7,048 $ 2,740 Net income attributable to common shareholders per share (4) $ 0.29 $ 0.14 $ 0.04 $ 0.08 $ 0.03 Cash flow from operations (1)(3) $ 44,874 $ 11,177 $ 9,880 $ 13,932 $ 9,885 Cash flow from operations per share (1)(3) $ 0.50 $ 0.13 $ 0.11 $ 0.15 $ 0.11 Capital expenditures $ 15,486 $ 7,124 $ 4,079 $ 2,752 $ 1,532 Debt net of cash outstanding before deferredfinancing charges and other expenses $ 131,413 $ 131,413 $ 91,971 $ 97,868 $ 87,360

Equity attributable to common shareholders $ 340,416 $ 340,416 $ 332,108 $ 335,058 $ 330,249 Weighted average shares outstanding, net 89,991,561 89,358,410 89,383,682 90,611,432 90,633,410

Notes:



(3) For non-recurring items in the prior quarters, refer to the prior quarter management discussion & analysis.

(4) 2011 includes a $15.1 million one-time gain within an associate entity.


The main factors affecting comparability of results over the last eight quarters are:

• Operating performance of the Company’s various business units and general market conditions during the reported periods;

• The acquisitions and dispositions made during the second and fourth quarters of 2011, and the second quarter of 2012;

• Restructuring expenses in 2011 and 2012;

• Stock based compensation of $0.3 million in the first quarter of 2011;

• Transaction and transition costs of $1.1 million in the fourth quarter of 2011, and $0.1 million, $0.3 million, $0.6 million and $1.1 million in the first, second, third and fourth quarters of 2012, respectively;

• A goodwill and intangible assets impairment charge of $0.7 million in the second quarter of 2011, $8.5 million in the fourth quarter of 2011 and $8.5 million in the fourth quarter of 2012;

• A one-time gain in earnings from associates of $15.1 million in the fourth quarter of 2011;

• Other income of $3.1 million in the third quarter of 2012 related to the redemption of miscellaneous investments received in connection with the 2008 Sun Times settlement;

• Gain on acquisition of $1.1 million in the second quarter of 2012 related to the acquisition of control of ANGLP; and

• The seasonal nature of some of Glacier’s businesses.

MArK MELViLLEExecutive Vice-President, Corporate Development

The modern media company has to be many things to many people, but at the core of what it does must be an unrelenting focus on content and platforms that meet customer needs at the right time, for the right price. This means paying close attention to evolving information requirements and innovating to meet those needs, whether it involves new digitally driven business intelligence tools or integrated marketing solutions. Ultimately, our customers look to us for one thing: a measurable return on the information we provide.

EBITDA, Cash Flow from Operations and Net Income Attributable to Common Shareholders before Non-recurring Items Reconciliation

The following table reconciles the Company’s net income attributable to common shareholders as reported under IFRS to EBITDA, cash flow from operations and net income attributable to common shareholders before non-recurring items.


EBITDA (1)Net income attributable to common shareholders $ 10,630 $ 25,731 $ 13,584 Add (deduct): Non-controlling interest $ 4,311 $ 1,988 $ 1,799 Depreciation of property, plant and equipment $ 6,621 $ 5,708 $ 5,774 Amortization of intangible and other assets $ 9,280 $ 8,357 $ 8,292 Impairment expense $ 8,503 $ 9,151 $ 4,016 Income tax expense $ 6,263 $ 6,580 $ 5,093 Interest $ 6,074 $ 4,616 $ 6,223 Other income $ (3,703) $ – $ –Share of losses (earnings) from associates $ (269) $ (16,257) $ (1,102)Gain on acquisition $ (1,102) $ – $ (1,399)Other expenses $ 3,785 $ 3,266 $ 1,689

EBITDA (1) $ 50,393 $ 49,140 $ 43,969

Cash flow from operations (1) $ $ $Net income attributable to common shareholders $ 10,630 $ 25,731 $ 13,584 Add (deduct): $ $ $Non-controlling interest $ 4,311 $ 1,988 $ 1,799 Depreciation and amortization $ 15,901 $ 14,065 $ 14,066 Impairment expense $ 8,503 $ 9,151 $ 4,016 Employee future benefits $ 419 $ 69 $ 717 Deferred income taxes $ 5,437 $ 5,761 $ 4,260 Non cash interest $ 157 $ 1,042 $ 1,491 Stock option expense $ – $ 289 $ –Gain on acquisition $ (1,102) $ – $ (1,399)Share of losses (earnings) from associates $ (269) $ (16,257) $ (1,102)(Gain) loss on disposal of assets $ 158 $ – $ (246)(Gain) loss on change in fair value of derivative financial instruments $ (72) $ 389 $ (1103)Other non-cash expenses $ (104) $ 14 $ 63 Other income $ (3,136) $ – $ –Restructuring costs $ 1,351 $ 1,555 $ 993 Transaction and transition costs $ 2,077 $ 1,077 $ 1,935

Cash flow from operations (1) $ 44,261 $ 44,874 $ 39,074

Notes:




Net income attributable to common shareholders before non-recurring items (1)Net income attributable to common shareholders $ 10,630 $ 25,731 $ 13,584 Add (deduct): (Gain) loss on disposition of assets $ 158 $ – $ (246)Restructuring costs $ 1,351 $ 1,555 $ 993 Other income $ (3,136) $ – $ –One-time gain included in associate earnings $ – $ (15,144) $ –Gain on acquisition $ (1,102) $ – $ (1,399)Stock option expense $ – $ 289 $ –Impairment expense $ 8,503 $ 9,151 $ 4,016 Transaction and transition costs $ 2,077 $ 1,077 $ 1,935 Other expenses $ – $ (44) $ 110

Net income attributable to common shareholders before non-recurring items (1) $ 18,481 $ 22,615 $ 18,993

Weighted average shares outstanding, net 89,357,465 89,991,561 92,023,970

EBITDA per share (1) $ 0.56 $ 0.55 $ 0.48

Net income attributable to common shareholders before non-recurring items per share (1) $ 0.21 $ 0.25 $ 0.21

Net income attributable to common shareholders per share $ 0.12 $ 0.29 $ 0.15

Cash flow from operations per share (1) $ 0.50 $ 0.50 $ 0.42

Notes:


(Continued from page 30)

Glacier generates sufficient cash flow from operations to meet anticipated working capital, capital expenditures, and debt service requirements.

As at December 31, 2012, Glacier had consolidated cash and cash equivalents of $5.2 million, current and long-term debt of $132.3 million before adjustment for deferred financing fees attributable directly to the issuance of long-term debt, and working capital of $29.0 million excluding deferred revenue. Glacier’s long-term debt increased an additional $12.6 million on April 1, 2012 as a result of the acquisition of control of ANGLP. Glacier’s actual cash working capital is greater than reflect-ed by the amounts indicated on the consolidated balance sheet due to deferred revenue relating to quarterly updates, renewals and newspaper subscriptions that have been paid for by subscribers but not yet delivered, and the costs associated with the fulfillment of this liability are less than the amount indicated in current liabilities and Glacier receives cash revenue on an ongoing basis that offsets the deferred revenue liability.

Management believes that cash flow from operations before changes in non-cash operating accounts (see Consolidated Statements of Cash Flows) is the most appropriate measure to determine Glacier’s profitability and return on equity, as the Company has low ongoing sustaining capital expenditures and depreciation and amortization largely relate to intangible assets and do not represent a correspond-ing ongoing sustaining capital expense. Management also monitors free cash flow (being cash flow from operations net of capital expenditures, debt service and investment in working capital) closely to measure ongoing overall cash flow strength.

Capital expenditures were $16.9 million for the year ended December 31, 2012 compared to $15.5 million last year. $14.5 million of these capital expenditures were investment capital expendi-tures, the majority of which relate to the building and installation of a new press facility that is expected to be completed in 2013. Sustaining capital expenditures for the year were $2.4 million.

Changes in Financial PositionFor the years ended December 31,

(thousands of dollars) 2012 2011 2010Cash generated from (used in)

Operating activities 39,843 49,407 35,311 Investing activities (15,666) (79,461) (11,926)Financing activities (28,167) 38,840 (25,329)

Increase (Decrease) in cash (3,990) 8,786 (1,944)

The changes in the components of cash flows during the 2012 and 2011 are detailed in the consol-idated statements of cash flows of the Financial Statements. The more significant changes are discussed below.

Summary of Financial Position, Financial Requirements and Liquidity


Operating Activities Glacier generated cash from operations before non-recurring items and changes in non-cash operating accounts of $44.3 million in 2012 compared to $44.9 million in the prior year. The decrease was primarily due to higher inter-est expense from acquisitions, and other cash expenses. Cash from operations before non-re-curring items and after change in non-cash working capital was $40.1 million compared to $52.0 million in the same period in the prior year.

Investing Activities Cash used in investing activities totalled $15.7 million for the year ended December 31, 2012 compared to $79.5 million in 2011, which includ-ed the acquisition of the Postmedia assets in November 2011. Investing activities included $14.5 million of investment capital expenditures, $2.4 million of sustaining capital expenditures, dividends received and other investing activities.

Financing ActivitiesCash used for financing activities was $28.2 million for the year ended December 31, 2012 compared to $38.8 million generated in 2011. The Company made net debt repayments of $20.9 million for the year compared to net borrowings of $44.8 million in the prior year. In 2012, the Company repurchased shares of $0.2 million, compared to $3.0 million in the prior year.

Outstanding Share DataAs at December 31, 2012 and March 27, 2013, there were 89,243,102 common shares, 475,000 share purchase options and 1,115,000 share purchase warrants outstanding. The options have an exercise price of $2.44 per share and expire on March 29, 2014. The warrants outstanding allow the holder to purchase one common share per warrant at $4.48 per share. These warrants expire on June 28, 2014, unless extended.

rOb PENTNEYPresident, Junewarren-Nickle’s Energy Group

Canada’s energy sector is one of the linchpins of our economy. From our offices in Calgary and Edmonton, we provide a broad range of information and insights – both in print and on digital platforms – that our customers use to make important business decisions. Whether it’s geo-referenced locations of drilling rigs or analysis of key industry trends, our readers and advertisers rely on us to lead the important debates and discussions that move industry forward both domestically and increasingly, in a global context. We’re constantly evolving and enhancing our portfolio to ensure our clients have no need to go anywhere else.

Contractual AgreementsAs at December 31, 2012, Glacier has agreements with a syndicate of major Canadian banks whereby the lenders provided a single revolving loan facility with no required principal repayments during its term. There were no changes to the Company’s banking agreements during the year ended December 31, 2012.

The Company also has additional long term debt with a major international bank which is held by ANGLP and is non-recourse to the Company.

In May 2012, the Company entered into a foreign exchange contract to sell US$100,000 per month commencing June 2012 at rates of CAD$1.030 to $1.036, which expires in May 2013.

The Company has also entered into operating leases for premises and office equipment, which expire on various dates up to 2019.

In summary, the Company’s contractual obligations excluding the U.S. dollar foreign exchange contract, due over the next five calendar years, are as follows:

(thousands of dollars) Total 2013 2014 2015 2016 2017 ThereafterLong term debt 131,197 13,088 6,868 103,317 5,676 179 2,069 Finance leases 660 660 - - - - - Operating leases 22,480 5,184 4,052 3,141 2,672 2,442 4,989

154,337 18,932 10,920 106,458 8,348 2,621 7,058

Under various financing arrangements with its banks, the Company, its subsidiaries, and its affil-iates are required to meet certain covenants. The Company, its subsidiaries, and its affiliates were fully in compliance with these covenants at December 31, 2012 and 2011.

Financial InstrumentsThe Company’s activities result in exposure to a variety of financial risks, including risks relating to foreign exchange, credit, interest rate risk, and liquidity risk.

A small portion of the Company’s products are sold at prices denominated in U.S. dollars or based on prevailing U.S. dollar prices while the majority of its operational costs and expenses are incurred in Canadian dollars. An increase in the value of the Canadian dollar relative to the U.S. dollar reduces the revenue in Canadian dollar terms realized by the Company from sales made in U.S. dollars. The Company also has investments in self-sustaining operations in the United States, whose net assets are exposed to foreign currency translation risk.

As indicated, the Company currently hedges a portion of its foreign exchange exposure with financial forward contracts. During the year ended December 31, 2012, Glacier had foreign exchange forward contracts to sell U.S.$125,000 per month at a rate of CAD$1.162, which expired in April 2012 and entered into foreign exchange forward contracts to sell U.S.$100,000 per month which commenced June 2012 at rates between CAD$1.030 and CAD$1.036, and expires in May 2013. An assumed $0.01 increase in the USD/CAD foreign exchange rate during the year ended December 31, 2012 would have a $0.2 million impact on pre-tax net income. An assumed $0.01 decrease would have an equal but opposite effect on pre-tax net income.

The Company sells its products and services to a variety of customers under various payment terms and therefore is exposed to credit risks from its trade receivables from customers. The Company has adopted policies and procedures designed to limit these risks. The carrying amounts for trade receivables are net of


applicable allowances for doubtful accounts, which are estimated based on past experience, specific risks associated with the customer and other relevant information. The Company is protected against any concentration of credit risk through its products, broad clientele and geographic diversity.

The Company’s interest rate risk mainly arises from the interest rate impact on cash and float-ing rate debt. The Company actively manages its interest rate risk through ongoing monitor-ing of market interest rates and the overall economic situation. In the past, the Company had entered into five year amortizing interest rate swap contracts with fixed interest rates and variable acceptance fees.

The fair value of exchange contracts represents an estimate of the amount that the Company would receive or pay if the contracts were closed out at a market price on the balance sheet date. The Company concluded that those contracts do not qualify for hedge accounting; therefore, changes in fair value of the contracts are record-ed in the statement of operations each period.

The Company is exposed to liquidity risk with respect to trade payables, long-term debt, derivatives and contractual obligations. The Company manages liquidity by maintaining adequate cash balances and by having appro-priate lines of credit available. In addition, the Company continuously monitors and reviews both actual and forecasted cash flows. Manage-ment believes that future cash flows from operations and the availability under exist-ing banking arrangements will be adequate to support its financial liabilities.

The carrying value of certain financial instru-ments maturing in the short-term approximates their fair value. These financial instruments include cash and cash equivalents, trade receiv-ables, trade payables, dividends payable, and other current liabilities. The fair value of the other financial instruments is determined essentially by discounting cash flows or quoted market prices. The fair values calculated approximate the

amounts for which the financial instruments could be settled between consenting parties, based on current market data for similar instru-ments. Consequently, as estimates must be used to determine fair value, they must not be interpreted as being realizable in the event of an immediate settlement of the instruments. For fair value estimates relating to deriva-tives and available-for-sale securities, the Company classifies its fair value measurements within a fair value hierarchy, which reflects the significance of the inputs used in making the measurements. The fair value of all of the Company’s available for sale financial instru-ments was determined using quoted prices in active markets.

Business Environment and Risks

Foreign ExchangeA portion of Glacier’s revenue is generated in U.S. dollars and as such is subject to exchange rate fluctuations. In order to partially hedge this risk, the Company currently hedges a portion of its foreign exchange exposure with financial forward contracts. As at December 31, 2012 Glacier has foreign exchange forward contracts to sell U.S.$100,000 per month which commenced in June 2012 at rates between CAD$1.030 and CAD$1.036, and expires in May 2013. During the year ended December 31, 2012 Glacier had foreign exchange forward contracts to sell U.S.$125,000 per month which commenced in April 2009 at a rate of CAD$1.162, and expired in April 2012. Despite this hedge, a strengthening in the Canadian dollar could have an impact on Glacier’s revenue given that the amount of Glacier’s revenue received in U.S. dollars exceeds the amount of the hedge contracts. Glacier monitors foreign exchange markets on an ongoing basis to deter-mine appropriate levels of hedging.

Government ProgramsThe Department of Canadian Heritage’s Canada Periodical Fund provides postal assistance to eligible Canadian publications, including Western Producer Publications, Farm Business Communications and the Glacier Community Media group. While this program has been in place for decades, there is no guarantee that this assistance will continue to be offered.

General Market ConditionsGlacier’s Community Media Group generates revenue through the sale of advertising and newspaper subscriptions. As such, it is reliant upon general economic conditions and the

spending plans of advertisers. A significant downturn in the national or regional econo-mies may adversely affect revenues, as could significant changes in advertisers’ promotion-al strategies.

Glacier’s publications are affected by changes in the prices of purchased supplies, including newsprint.

Although Glacier is well diversified, competition is a continuing risk from existing businesses or new ones in a variety of media formats including print, online, radio and broadcast.

• The community media group publishes newspapers in a variety of communities in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Quebec, Rhode Island and is diversified as a result;

• The trade information group (Western Producer Publications, Farm Business Communications, JuneWarren-Nickle’s Energy Group, Business Information Group and the Business In Vancouver Media Group) publishes a wide variety of trade publications distributed across Canada;

• Fundata competes with other companies in the financial information market in Canada;

• Ecolog ERIS provides comprehensive information from a variety of databases regarding potential environmental liability; and

• Glacier disseminates its information in print, online and digital format.

OrEsT sMYsNuiK | Chief Financial Officer, Glacier Media

Knowing how to link your customers with their customers is a key responsibility of an information services company—and when you do it well, opportunities come your way consistently. That means an important focus on data quality and data integrity: keeping your information as comprehensive and up-to-date as possible. Our customers rely on us to provide critical information linkages to their customers; in that way, we facilitate important decision-making. When that data linking is complemented by contextual content, its utility to our customers is enhanced and they welcome dependence on us as part of their business success.


The large North American business and profession-al information, newspaper and trade information markets and other information communications markets continue to offer many growth opportuni-ties for the Company.

Additional information on the Company’s business environment and risks is included in the Company’s Annual Information Form (“AIF”) filed on SEDAR.

Disclosure Controls and Internal Controls over Financial ReportingThe Company has established disclosure controls and procedures to ensure that information disclosed in this MD&A and the related financial statements was properly recorded, processed, summarized and reported to the Audit Committee and the Board. The Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) have evaluated the effectiveness of these disclosure controls and proce-dures for the year ending December 31, 2012, and have concluded that they are effective.

The CEO and CFO, while acknowledging responsi-bility for the design of internal controls over financial reporting (“ICFR”), and confirming that there were no changes in these controls that occurred during the most recent year ended December 31, 2012 which materially affected, or are reasonably likely to materi-ally affect, the Company’s ICFR and based upon their evaluation of these controls for the year ended December 31, 2012, the CEO and CFO have concluded that these controls are effective. The CEO and CFO have certified such findings and reported to the Audit Committee, who in turn, has included such certifica-tion and report in the Audit Committee’s recommen-dation to the Board of Directors. The Board of Direc-tors in passing its resolutions acknowledges that it is basing and relying on such certification and report.

The CEO and the CFO have limited the scope of design of disclosure controls and procedures and ICFR to exclude controls, policies and procedures of Great West, Fundata and Rhode Island Suburban Newspaper Inc., each a proportionately consoli-dated entity in which the Company has an interest. These entities have combined net income of $7.9 million for the year ended December 31, 2012 and net assets of $53.9 million as at December 31, 2012.

Future accounting policiesIn November 2009, the IASB issued IFRS 9, Finan-cial Instruments, which becomes effective for annual periods beginning on or after January 1, 2015.

In May 2011, the IASB issued the following standards: IFRS 10, Consolidated Financial State-ments (IFRS 10), IFRS 11, Joint Arrangements (IFRS 11), IFRS 12, Disclosure of Interests in Other Entities (IFRS 12), IAS 27, Separate Financial Statements (IAS 27), IFRS 13, Fair Value Measurement (IFRS 13) and amended IAS 28, Investments in Associ-ates and Joint Ventures (IAS 28). The adoption of these standards requires retrospective adoption with a transition date of January 1, 2012. These new standards will be effective for the Company on January 1, 2013 and will not be early adopted.

The Company is in the process of assessing the impact of these new standards. The Company has performed a preliminary assessment of the new standards with respect to its joint arrangements. The Company currently accounts for these entities using propor-tionate consolidation (refer to Note 26 to the financial statements). Under IFRS 11, Joint Arrangements, the Company expects that it will be required to equity account for these investments. This will result in material adjustments to the Company’s statement of operations, balance sheets and classification of cash flows commencing on January 1, 2013. The Company also expects that IFRS 12, Disclosure of Interests in Other Entities, may impact the required finan-cial statement disclosures for its subsidiaries, joint arrangements and associates.

In 2011, IAS 19, Employee benefits, was amended to include new guidance with respect to pension plans. A number of these changes were previously optional under IFRS 19, Employee Benefits, and were imple-mented by the Company on initial adoption of IFRS on January 1, 2011. Additional changes will be required to be adopted on January 1, 2013 including the method-ology for determining the Company’s annual pension expense for defined benefit pension arrangement, recognition of past service cost, income statement presentation and note disclosures.

Critical Accounting EstimatesThe preparation of annual financial statements in conformity with International Financial Reporting Standards requires management to make estimates and assumptions that affect the amounts recorded in the financial state-ments. Management regularly reviews these estimates, including those related to useful lives for depreciation and amortization, impairment of long-lived assets, certain trade receivables, pension and other employee future benefit plans based on currently available information. While it is reasonably possible that circumstances may arise which cause actual results to differ from these estimates, management does not believe it is likely that any such differences will materially affect Glacier’s financial position.

Income TaxesIn accordance with IFRS recommendations, Glacier recognizes future income tax assets when it is more likely than not that the future income tax assets will be realized. This assumption is based on management’s best estimate of future circumstances and events. If these estimates and assumptions are changed in the future, the value of the future income tax assets could be reduced or increased, resulting in an income tax expense or recovery. Glacier re-evaluates its future income tax assets on a regular basis.

Retirement benefit assets/obligationsGlacier has defined benefit and defined contri-bution plans that provide both pension and other retirement benefits to certain salaried and hourly employees not covered by industry union plans.

Glacier uses independent actuarial firms to perform actuarial valuations of the fair value of pension and other retirement benefit plan obligations. The application of these recommen-dations requires judgments regarding certain assumptions that affect the accrued benefit provisions and related expenses, including the

discount rate used to calculate the present value of the obligations, the expected rate of return on plan assets, the rate of compensation increase and the assumed health care cost trend rates. Management and the Board of Director’s Pension Committee evaluate these assumptions annually based on experience and the recommendations of its actuarial firms. Changes in these assump-tions result in actuarial gains or losses, which are recorded in comprehensive income for the year.

Share-based paymentsThe Company provides incentives via share-based payment entitlements. The fair value of entitlements is independently determined using the Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the vesting and perfor-mance criteria, the share price at the grant date and expected price volatility of the underly-ing share, the expected dividend yield and the risk-free interest rate for the term of the option. If certain assumptions used in the fair value calculation were to change, there would be an impact on the statement of operations in future financial periods.

Impairment of intangible assets and goodwillIntangible assets with a finite life, which consist of copyrights, subscription lists, custom-er relationships, other intangible assets and software are reviewed for impairment when the occurrence of events or changes in circum-stances indicates that the carrying value of the assets may not be recoverable. The Company employed two different methods to test the recoverability of the carrying value of the amortizing intangible assets based on the type of amortizing intangible asset.


The recoverable amount of certain amortizing intangible assets, including customer relation-ships, has been determined using the value in use calculation which uses five year cash flows based on budgets approved by management that made maximum use of observable market inputs and outputs. For periods beyond the budget period, cash flows were extrapolated using growth rates consistent with the historical average group rates in the respective cash-generating-unit (“CGU”) or group of CGUs and taking into account expect-ed future operating results, cost savings achieved through cost savings initiatives, economic condi-tions and outlook for the industry within which the assets are employed/used.

The recoverable amount of certain other amortiz-ing intangible assets, including copyrights, has been determined using the value in use calculation which uses five year budgeted revenues to deter-mine the relief from royalties that the intangible assets provide. For periods beyond the budget period, revenues were extrapolated using growth rates consistent with the historical average rate for the specific CGU or group of CGUs in which these assets are employed.

Based upon the analysis performed, the Company concluded that there was an impairment of amortizing intangibles in 2012 and 2011 in the Business and Professional group of CGUs.

Non-amortizable intangible assets consisting mainly of mastheads which have an indefinite useful life and are not amortized, but tested annually for

impairment or more frequently if impairment indicators arise. The Company used the aggre-gate recoverable amount of the non-amortizing intangible assets included in each CGU or group of CGUs and compared it to their respective carrying amounts. The recoverable amount is determined using the value in use calculation which uses five year budgeted revenues to determine the relief from royalties that the mastheads provide. For periods beyond the budget period, revenues were extrapolated using growth rates consistent with the historical average rate for the CGU or group of CGUs where each of these assets were employed.

PETEr KVArNsTrOM | President, Community Media

Glacier’s community media publishers and their teams work hard to ensure the products they produce are “owned” by the communities they serve. That means simply that we work to encourage a sense of ownership among our readers and advertisers who rely on us to meet their information and marketing needs in a way that fosters a strong sense of community identity. Our customers should be able to hold up their newspapers as mirrors and see in the reflections their pride in the communities in which they live, work and play. If a newspaper cannot perform that basic requirement, it cannot consider itself part of its community.

Based upon the analysis performed in 2012, the Company concluded that there was an impair-ment of indefinite life intangible assets in the BC Community Media group of CGUs. In 2011, there was no impairment of non-amortizing intangible assets identified.

Goodwill, which is the excess of the purchase price paid for an acquisition over the fair value of the net assets acquired, is not amortized but is assessed annually for impairment or more frequently if events or circumstances indicate that it may be impaired.

In order to assess the goodwill for impairment, an analysis of the future expected discounted cash flows of the assets to which the goodwill relates is prepared as and when required. In conducting its annual impairment test of goodwill, the Company used the aggregate recoverable amount of the assets included in each CGU or group of CGUs and compared it to their respective carrying amounts. The recov-erable amounts for each CGU or group of CGUs were determined using the value in use calcu-lation which uses five year cash flow budgets approved by management that made maximum use of observable market inputs and outputs. For periods beyond the budgeted period, cash flows were extrapolated using growth rates consistent with the historical average group rates in the respective business segments and taking into account expected future operating results, cost savings achieved through various initiatives, economic conditions and outlook for the industry within which the CGU or group of CGUs operates. Also included in this assessment are assumptions relating to forecast prices, sales volumes and exchange rates. Given the inherent uncertainty regarding longer term sales volumes and exchange rates, management considers various possible scenarios and assigns probabili-ties to the likelihood of occurrence of each of these.

Based upon the analysis performed in 2012, the Company concluded that there was an impair-ment of goodwill at December 31, 2012 within

the Business and Professional, BC Community Media and Other Trade Information groups of CGUs. Accordingly, the Company has recorded an estimated impairment of goodwill in the year ended December 31, 2012. In 2011, the Company concluded that there was an impairment of goodwill within the Business and Profession-al, Prairie Community Media and Other Trade Information groups of CGUs.

Derivative financial instrumentsThe Company uses derivatives in the form of interest rate swaps and foreign exchange forward contracts to manage risks related to its variable rate debt and fluctuations in the value of the U.S. dollar. The fair values of over-the-counter deriv-atives are determined using valuation techniques adopted by the Company with assumptions that are based on market conditions existing at each balance sheet date. The fair values of inter-est rate swaps and foreign exchange forward contracts are calculated as the present value of the estimated future cash flows.

Fair value of business combinationsOn the acquisition of a business, the Company is required to identify and measure the various assets and liabilities acquired. This is based on the estimated fair value of each item acquired with the remainder of the purchase price being recognized as goodwill.

Estimated useful livesManagement estimates the useful lives of proper-ty, plant and equipment and amortizing intangible assets based on the period during which the assets are available for use. The amounts and timing of depreciation and amortization for these assets are affected by useful lives. The estimates are reviewed annually and are updated for changes in the assets’ expected useful life.


FINANCIALSTATEMENTS

Independent Auditor’s Report • Consolidated Statements of: Operations • Comprehensive Income Balance Sheets • Changes in Equity • Cash Flows

A N N U A L R E P O R TConsolidated Financial Statements 43

Consolidated Statements of Operations

Years ended December 31, 2012 and 2011(Expressed in thousands of Canadian dollars, except share and per share amounts)

2012 2011$ $

Revenue 330,016 267,394

Expenses before depreciation and amortizationDirect expenses (Note 23) 220,342 168,018General and administrative (Note 23) 59,281 50,236

50,393 49,140

Interest expense, net (Note 21) 6,074 4,616Depreciation of property, plant and equipment (Note 9) 6,621 5,708Amortization of intangible and other assets (Note 11) 9,280 8,357Other income (Note 19) (3,703) –Gain on acquisition (Note 6) (1,102) –Impairment expense (Notes 9, 10 and 11) 8,503 9,151Other expenses (Note 22) 3,785 3,266Share of earnings from associates (Note 7) (269) (16,257)

Net income before income taxes 21,204 34,299

Income tax expense (Note 20) 6,263 6,580

Net income for the year 14,941 27,719Net income attributable to:

Common shareholders 10,630 25,731Non-controlling interest 4,311 1,988

Earnings per share attributable to common shareholders (Note 17)Basic and diluted 0.12 0.29

Weighted average number of common sharesBasic and diluted 89,357,465 89,991,561

See accompanying notes to these consolidated financial statements.

Consolidated Statements of Comprehensive Income

Years ended December 31, 2012 and 2011(Expressed in thousands of Canadian dollars)

2012 2011$ $

Net income for the period 14,941 27,719

Other comprehensive income (loss) (net of tax) (Note 18)Actuarial (losses) on defined benefit pension plans (991) (5,488)Currency translation adjustment on joint venture (28) 63Unrealized (loss) on investments classified as available-for-sale (84) (325)Share of other comprehensive income (loss) from associates (Note 7) 942 (275)

Other comprehensive loss, net of tax (161) (6,025)

Total comprehensive income (loss) 14,780 21,694

Total comprehensive income attributable to:Common shareholders 10,482 19,893Non-controlling interest 4,298 1,801



Consolidated Balance Sheets

As at December 31, 2012 and 2011(Expressed in thousands of Canadian dollars)

2012 2011Asset $ $Current assetsCash and cash equivalents 5,216 9,206Trade and other receivables 62,284 58,746Inventory 5,722 5,431Prepaid expenses 3,376 3,248

76,598 76,631Non-current assetsInvestment in associates (Note 7) 61,937 62,369Other investments (Note 8) 3,953 3,970Other assets 1,376 1,595Property, plant and equipment (Note 9) 84,380 73,843Goodwill (Note 10) 228,061 207,139Intangible assets (Note 11) 167,732 166,209

Total assets 624,037 591,756

LiabilitiesCurrent liabilitiesTrade and other payables (Note 12) 32,159 34,080Dividends payable – 2,770Deferred revenue 21,656 20,861Current portion of long-term debt (Note 13) 13,749 10,724Other current liabilities 1,700 2,748

69,264 71,183Non-current liabilitiesNon-current portion of deferred revenue 736 652Other non-current liabilities 1,491 1,860Post-employment benefit obligation (Note 14) 12,484 10,471Long-term debt (Note 13) 118,108 129,272Deferred income taxes (Note 20) 25,607 23,478

Total liabilities 227,690 236,916

EquityShare capital (Note 16) 198,962 199,216Contributed surplus 8,844 8,792Accumulated other comprehensive loss (Note 18) (549) (441)Retained earnings 140,758 132,849Total equity attributable to common shareholders 348,015 340,416Non-controlling interest 48,332 14,424Total equity 396,347 354,840

Total liabilities and equity 624,037 591,756


Approved by the Directors

Jonathon J.L. Kennedy, Director Bruce W. Aunger, Director

Consolidated Statements of Changes in Equity

Years ended December 31, 2012 and 2011 (Expressed in thousands of Canadian dollars, except share amounts)

Attributable to common shareholdersShare capital

Contributed surplus

Accumulated other

comprehensive loss

Retained earnings Total

Non- controlling

interestsTotal

equityShares Amount

$ $ $ $ $ $ $Balance, December 31, 2011 89,358,410 199,216 8,792 (441) 132,849 340,416 14,424 354,840

Net income for the period – – – – 10,630 10,630 4,311 14,941

Other comprehensive income(loss) (net of tax): – – – (108) (40) (148) (13) (161)

Total comprehensive income(loss) for the period – – – (108) 10,590 10,482 4,298 14,780

Dividends declared and paid on common shares – – – – (2,681) (2,681) (85) (2,766)Acquisition of control of ANGLP – – – – – – 31,474 31,474Sale of minority shareholdings – – – – – – 16 16

Repurchase of non-controlling interest – – – – – – (231) (231)

Distributions to non-controlling interests – – – – – – (1,564) (1,564)Repurchase of common shares (115,308) (254) 52 – – (202) – (202)

Balance, December 31, 2012 89,243,102 198,962 8,844 (549) 140,758 348,015 48,332 396,347


Net income for the period – – – – 25,731 25,731 1,988 27,719

Other comprehensive income (loss) (net of tax): – – – (254) (5,584) (5,838) (187) (6,025)

Total comprehensive income (loss) for the period – – – (254) 20,147 19,893 1,801 21,694

Dividends declared on common shares – – – – (5,357) (5,357) – (5,357)

Distribution to non-controlling interests – – – – – – (340) (340)

Repurchase of non-controlling interest – – – – – – (648) (648)

Stock option expense – – 289 – – 289 – 289

Repurchase of common shares (1,275,000) (2,843) (141) – – (2,984) – (2,984)

Non-controlling interest on acquired businesses – – – – – – 18 18




Consolidated Statements of Cash Flows

Years ended December 31, 2012 and 2011 (Expressed in thousands of Canadian dollars)

2012 2011$ $

Operating activitiesNet income 14,941 27,719Items not affecting cash

Depreciation of property, plant and equipment 6,621 5,708Amortization of intangible and other assets 9,280 8,357Stock based compensation – 289Loss on disposal of assets 158 –Gain on acquisition (1,102) –Impairment expense 8,503 9,151Employee future benefit expense in excess of employer contributions 419 69Deferred income taxes 5,437 5,761Non-cash interest expense 157 1,042Share of losses (earnings) from associates (269) (16,257)(Gain)/loss on change in fair value of derivative financial instruments (72) 389Other non-cash expenses (104) 14

Cash flow from operations before changes in non-cash operating accounts 43,969 42,242Changes in non-cash operating accounts

Trade and other receivables (1,689) (5,092)Inventory (265) 269Prepaid expenses 8 (501)Trade and other payables (2,471) 13,862Deferred revenue 291 (1,373)

Cash generated from operating activities 39,843 49,407

Investing activitiesAcquisitions, inclusive of bank indebtedness assumed and related financing liabilities (381) (41,476)Net cash acquired on acquisitions 872 –Investment in associates (228) (21,791)Other investing activities (1,365) (2,056)Proceeds from disposal of assets 437 21Dividends received from associates 1,871 1,327Purchase of property, plant, equipment (13,806) (11,535)Purchase of intangible assets (3,066) (3,951)

Cash used in investing activities (15,666) (79,461)

Financing activitiesProceeds from long-term debt 4,383 55,465Purchase of common shares (202) (2,984)Distribution to non-controlling interests (1,564) (342)Dividends paid (5,536) (2,587)Repayment of long-term debt (25,248) (10,712)

Cash (used in) generated from financing activities (28,167) 38,840

Net cash inflow (outflow) (3,990) 8,786Cash and cash equivalents, beginning of period 9,206 420

Cash and cash equivalents, end of period 5,216 9,206

Supplemental information (Note 27)See accompanying notes to these consolidated financial statements.

NOTES TO THE CONSOLIDATED

FINANCIAL STATEMENTS

Business Description • Significant Accounting Policies and Standards • Acquisitions • Investment in Associates • Property, Plant and Equipment • Goodwill • Intangible Assets • Trade and Other Payables • Long-Term Debt • Benefit Obligations • Contingencies and Commitments • Share Capital

Earnings Per Share • Income Taxes • Related Party Transactions • Joint Ventures • Capital Disclosures

A N N U A L R E P O R T Notes to the Consolidated Financial Statements 49

Years ended December 31, 2012 and 2011(Amounts in tables expressed in thousands of Canadian dollars, except share and per share amounts)

1. General business descriptionGlacier Media Inc. (“Glacier” or the “Company”) is an information communications company providing primary and essential information and related services through print, electronic and online media. Glacier is pursuing this strategy through its core business segments: the Community Media and Trade Information, and Business and Professional sectors.

The Company is incorporated under the Canada Business Corporations Act, with common shares listed on the Toronto Stock Exchange (“TSX”). The address of its head office is 1970 Alberta Street, Vancouver, British Columbia.

2. Basis of preparation These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) applicable to the preparation of consolidated financial statements.

These financial statements have been approved by the Board of Directors for issue on March 27, 2013.

In accordance with IFRS, the comparative information has been restated for the finalization of the purchase accounting related to acquisitions on November 30, 2011. Refer to Note 6 (d).

3. Significant accounting policiesThe principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

(a) Basis of measurementThe consolidated financial statements have been prepared under the historical cost convention, except for the revalua-tion of certain financial assets and financial liabilities to fair value, including derivative instruments and available-for-sale investments.

(b) Principles of consolidation

SubsidiariesThe consolidated financial statements incorporate the assets and liabilities of all entities controlled by the Company as at December 31, 2012 and the results of all controlled entities for the year then ended. Controlled entities are those entities over which the Company has the power to govern the financial and operating policies, generally accompanying a share-holding of more than one-half of the voting rights. The existence and effect of potential voting rights that are current-ly exercisable or convertible are considered when assessing whether the Company controls another entity. In addition, control for these purposes may exist without having more than 50% of the voting power through ownership or agree-ments, or in the circumstances of enhanced minority rights, as a consequence of de facto control. De facto control is control without the legal right to exercise unilateral control, and involves decision making ability that is not shared with others and the ability to give direction with respect to the operating and financial policies of the entity concerned.

All inter-company balances, transactions and unrealized profits resulting from inter-company transactions have been eliminated. Where control of an entity is acquired during a financial year, its results are included in the statement of operations from the date on which control commences. Where control of a subsidiary ceases during a financial year, its results are included up to the point in the year when control ceases.

Non-controlling interestsNon-controlling interests represent equity interests in subsidiaries owned by outside parties. The share of net assets of subsidiaries attributable to non-controlling interests is presented as a component of equity. Their share of net income and comprehensive income is recognized directly in equity. Changes in the parent company’s ownership interest in subsidiaries that do not result in a loss of control are accounted for as equity transactions.


AssociatesAssociates are entities over which the Company has significant influence but not control. Generally, the Company has a voting shareholding of between 20% and 50% of the voting rights in its associates. Investments in associates are account-ed for using the equity method as follows:

• Investments are initially recognized at cost.

• Associates include goodwill and intangibles identified on acquisition, net of any accumulated impairment loss.

• The Company’s share of its associate’s post-acquisition profits or losses is recognized in the statement of operations. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from associates reduce the carrying amount of the investment.

• Gains on transactions between the Company and its equity method investees are eliminated to the extent of the Company’s interest in these entities, and losses are eliminated unless the transaction provides evidence of an impair-ment of the asset transferred.

Joint venturesJoint ventures are entities over which the Company has joint control with one or more unaffiliated entities. Joint ventures are accounted for using the proportionate consolidation method as follows:

• The balance sheets include the Company’s share of the assets that it controls jointly and the liabilities for which it is jointly responsible.

• The statement of operations includes the Company’s share of the income and expenses of the jointly controlled entity.

• Gains on transactions between the Company and its joint ventures are eliminated to the extent of the Company’s interest in the joint ventures, and losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred.

The accounting policies of subsidiaries, associates and joint ventures were changed where necessary to ensure consis-tency with the policies adopted by the Company.

(c) Foreign Currency

Functional and presentation currencyThe consolidated financial statements are presented in Canadian dollars, which is Glacier’s functional currency.

The financial statements of entities that have a functional currency different from that of Glacier (“foreign operations”) are translated into Canadian dollars as follows: assets and liabilities at the closing rate at the date of the balance sheet, and income and expenses at the average rate. All resulting changes are recognized in other comprehensive income as currency translation adjustments.

Transactions and balancesForeign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign currency balances are translated at the year-end exchange rate. Generally, foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in currencies other than an operation’s functional curren-cy are recognized in the statement of operations.


(d) Revenue recognitionRevenue from the sale of technical manuals and single copy newspapers is recognized when products are delivered in accordance with the terms of the customer contract.

Subscription revenue is recognized as each of the applicable updates or newspapers is delivered. Subscription revenue for which consideration has been received in advance and is attributable to future updates and issues is deferred until such updates or issues are delivered.

Advertising revenue is recognized upon publication of the editions in which the advertisements appear.

Revenue from printing and publishing services is recognized when the production process is completed in accordance with the terms of the printing and publishing contracts. Amounts collected or billed in excess of revenue recognized are recorded as deferred revenue.

(e) Income taxesTax expense comprises current and deferred tax. Tax is recognized in the statement of operations except to the extent it relates to items recognized directly in equity, in which case the related tax is recognized in equity.

Current tax expense is based on the results for the year as adjusted for items that are not taxable or not deductible. Current tax is calculated using tax rates and laws that were enacted or substantively enacted at the balance sheet date.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax liabilities are recog-nized for taxable temporary differences arising on investments in subsidiaries, associates and joint ventures except where the reversal of the temporary difference can be controlled and it is probable that the difference will not reverse in the foreseeable future.

Deferred tax is accounted for using a temporary difference approach and is the tax expected to be payable or recoverable on temporary differences between the carrying amount of assets and liabilities in the balance sheets and the correspond-ing tax bases used in the computation of taxable profit. Deferred tax is calculated based on the expected manner of reali-zation or settlement of the carrying amount of assets and liabilities, using tax rates that are expected to apply to the year of realization or settlement based on tax rates and laws enacted or substantively enacted at the balance sheet date.

Deferred tax assets are recognized to the extent it is probable that taxable profits will be available against which the deductible temporary differences can be utilized. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities are not recognized on temporary differences that arise from goodwill. Deferred tax assets and liabilities are not recognized in respect of temporary differences that arise on initial recognition of assets and liabilities acquired other than in a business combination.

(f) Cash and cash equivalentsCash and cash equivalents comprise cash on hand, demand deposits, and investments with an original maturity at the date of purchase of three months or less.

(g) InventoryInventory consists of newsprint, publishing supplies and work in progress amounts relating to certain publications. These amounts are stated at the lower of cost and net realizable value.

Costs are assigned to inventory quantities on hand at the balance sheet date using either the average cost or a first-in, first-out basis, based on the nature of the inventory. Cost comprises material, labour and an appropriate proportion of fixed and variable overheads. Net realizable value is the estimated selling price in the ordinary course of the business less the estimated cost of completion and the estimated cost necessary to make the sale.


(h) Property, plant and equipmentProperty, plant and equipment are recorded at cost less accumulated depreciation. Costs directly attributable to the acquisition or construction of fixed assets, including internal labour and interest, are also capitalized as part of the cost.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of operations during the financial year in which they are incurred.

DepreciationLand is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives, as follows:

Building 20 – 40 yearsProduction equipment 3 – 25 yearsOffice equipment and fixtures 3 – 15 yearsLeased equipment 3 – 15 yearsLeasehold improvements 5 – 20 years

The Company allocates the amount initially recognized in respect of an item of property, plant and equipment to its significant components and depreciates separately each such component.

Leasehold improvements are amortized on a straight-line basis over the lesser of their useful life and the term of the lease.

The assets’ residual values, method of amortization and useful lives are reviewed and adjusted, if appropriate, at least annually. An asset’s carrying amount is written down to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount. These are included in the statement of operations.

(i) Identifiable intangible assetsUpon acquisition, identifiable intangible assets are recorded at fair value. The carrying values of all intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Additionally, the carrying values of identifiable intangible assets with indefinite lives are tested annually for impairment. Impairment is determined by comparing the recoverable amount of such assets with their carrying amounts. The Company evaluates impairment losses for potential reversals when events or changes in circumstances warrant such consideration.

Trademarks and MastheadsTrademarks and newspaper mastheads are initially recorded at fair value. The trademarks and mastheads have been assessed to have indefinite useful lives. Accordingly, they are not amortized and are tested for impairment annually or when there is a change in circumstances that indicates that the carrying value may not be recoverable, and are carried at cost less accumulated impairment losses. For purposes of impairment testing, the fair value of trademarks and mastheads is determined using the relief from the royalty’s method.

The Company’s trademarks and mastheads operate in established markets with limited restrictions and are expected to continue to complement the Company’s media initiatives. On this basis, the Company has determined that trademarks and mastheads have indefinite lives as there is no foreseeable limit to the period over which the assets are expected to generate cash flows for the Company.


Other identifiable intangible assetsOther identifiable intangible assets consist of copyrights, subscription lists, customer relationships and other intangible assets and are recorded at cost. Copyrights are amortized on a straight-line basis over their expected useful life of 10 to 30 years. Subscription lists and customer relationships are amortized on a straight-line basis over their expected life of 3 to 15 years. Other identifiable intangible assets with finite lives are tested for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.

Computer softwareAcquired computer software licenses are capitalized as an intangible asset as are internal and external costs directly incurred in the purchase or development of computer software, including subsequent upgrades and enhancements when it is probable that they will generate future economic benefits attributable to the consolidated entity. These costs are amortized using the straight-line method over their expected useful lives of 3 to 5 years.

(j) GoodwillGoodwill represents the excess of the consideration of an acquisition over the fair value of the Company’s share of the net identifiable assets of the acquired subsidiary/associate at the date of acquisition. Goodwill on acquisitions of associates is included in investments in associates. Goodwill is not amortized. Instead, goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

(k) Impairment of non-financial assetsNon-financial assets are tested for impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable. In addition, long-lived assets that are not amortized are subject to an annual impair-ment assessment. An impairment charge is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell, and value in use.

Goodwill is reviewed for impairment annually or at any time if an indicator of impairment exists. For the purposes of impairment testing, goodwill acquired through a business combination is allocated to each cash generating unit (“CGU”) or group of CGUs that are expected to benefit from the related business combination. A group of CGUs represents the lowest level within the entity at which the goodwill is monitored for internal management purposes, which is not higher than an operating segment.

Non-financial assets, other than goodwill, that suffer impairment are evaluated for possible reversal of the impairment when events or circumstances warrant such consideration.

(l) LeasesA distinction is made between finance leases, which effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to ownership of leased non-current assets, and operating leases under which the lessor effectively retains substantially all such risks and benefits.

Assets acquired under finance leases are included as property, plant and equipment in the balance sheet. Finance leases are capitalized at the lease’s inception at the lower of the fair value of the leased property and the present value of the minimum lease payments. A corresponding liability is also established and each lease payment is allocated between the liability and finance charges. The interest element is charged to the statement of operations over the period of the lease.

Leased assets are depreciated in the same manner as property, plant and equipment that are owned, on a straight-line basis, net of their residual values, over their estimated useful lives. Where there is not reasonable certainty that the consolidated entity will obtain ownership of the leased assets by the end of the lease term, the asset is fully depreciated over the shorter of the lease term and its useful life.


Other leases under which all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Operating lease payments, excluding contingent payments, are charged to expense on a straight-line basis over the period of the lease term unless another systematic basis is more representative of the time pattern of the Company’s benefit.

(m) ProvisionsProvisions for restructuring costs and legal claims, where applicable, are recognized in trade and other payables when the Company has a legal, equitable or constructive obligation to make a future outflow of economic benefits to others as a result of past transactions or past events, it is probable that a future outflow of economic benefits will be required, and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the balance sheet date using a discounted cash flow methodology. Provisions are not recognized for future operating losses.

(n) Employee pension and other post-employment benefits The Company has defined benefit and defined contribution plans that provide both pension and other retirement benefits to certain salaried and hourly employees not covered by industry union plans.

A liability or asset in respect of defined benefit pension plans and certain other post-employment benefit plans is recog-nized in the balance sheet, and is measured as the present value of the defined benefit obligation at the reporting date less the fair value of the pension fund’s assets. The present value of the defined benefit obligation is based on expected future payments which arise from membership of the fund to the reporting date, calculated by independent actuaries using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.

Actuarial gains and losses are recognized in full in the year in which they occur, in other comprehensive income and retained earnings without recycling to the statement of operations in subsequent years. Current service cost, the recog-nized element of any past service cost, the expected return on plan assets and the interest on the pension liability are included in the same line items in the statement of operations as the related compensation expense.

(o) Stock-based compensationThe fair value of options granted under the Stock Option Plan is recognized as a compensation expense with a corre-sponding increase in contributed surplus within the Company’s equity. The fair value is measured at the grant date and recognized over the period during which the options vest. Each tranche in an award is considered as a separate award with its own vesting period and grant date fair value.

The fair value at the grant date is independently determined using the Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the vesting and performance criteria, the share price at the grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.

(p) Government grantsIncome based government grants provided to offset an expense are recorded as a decrease in the expense in the year in which the expense is incurred. Any amounts due from the Government for qualifying expenses are recorded in trade receivables. Any amounts received in advance are recorded in current liabilities until the related expense is incurred.

(q) Share capitalCommon shares are classified as equity. Incremental costs directly attributable to the issuance of shares are recognized as a deduction from equity.


(r) DividendsDividends on common shares are recognized as a liability in the Company’s financial statements when the dividends are declared by the Board of Directors of the Company.

(s) Earnings per share

Basic earnings per shareBasic earnings per share is calculated by dividing profit attributable to equity holders of the Company, excluding any costs to service equity other than common shares, by the weighted average number of common shares outstanding during the year.

Diluted earnings per shareDiluted earnings per share is calculated by adjusting the weighted average shares outstanding for dilutive instruments. The number of shares included with respect to options, warrants and similar instruments is computed using the treasury stock method.

(t) Borrowing costsBorrowing costs attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use. All other borrowing costs are recognized as interest expense in the statement of operations in the year in which they are incurred.

(u) Financial instrumentsFinancial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership.

Financial assets and liabilities are offset and the net amount is reported on the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously.

At initial recognition, the Company classifies its financial instruments in the following categories depending on the purpose for which the instruments were acquired:

(i) Financial assets and liabilities at fair value through profit or loss: A financial asset or liability is classified in this category if acquired principally for the purpose of selling or repurchasing in the short term. Derivatives are also included in this category unless they are designated as hedges. The only instruments held by the Company classified in this category are interest rate swaps and foreign exchange forward contracts.

Financial instruments in this category are recognized initially and subsequently at fair value. Transaction costs are expensed in the statement of operations. Gains and losses arising from changes in fair value are presented in the statement of operations within other gains and losses in the year in which they arise. Financial assets and liabilities at fair value through profit or loss are classified as current except for the portion expected to be realized or paid beyond twelve months of the balance sheet date, which is classified as non-current.

(ii) Available-for-sale investments: Available-for-sale investments are non-derivatives that are either designated in this category or not classified in any of the other categories. The Company’s available-for-sale assets comprise market-able securities and investments in other equity instruments.

Available-for-sale investments are recognized initially at fair value plus transaction costs and are subsequently carried at fair value. Equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are subsequently measured at cost. Gains or losses arising from changes in fair value are recognized in other comprehensive income. Available-for-sale investments are classified as non-current, unless the investment matures within twelve months, or management expects to dispose of them within twelve months.


Interest on available-for-sale investments, calculated using the effective interest method, is recognized in the state-ment of operations as part of interest income. Dividends on available-for-sale equity instruments are recognized in the statement of operations as part of other gains and losses when the Company’s right to receive payment is estab-lished. When an available-for-sale investment is sold or impaired, the accumulated gains or losses are moved from accumulated other comprehensive income to the statement of operations and are included in other gains and losses.

(iii) Loans and receivables: Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. The Company’s loans and receivables comprise cash and cash equivalents and trade and other receivables, and are included in current assets due to their short-term nature.

Loans and trade and other receivables are initially recognized at the amount expected to be received, less, when material, a discount to reduce the loans and receivables to fair value. Subsequently, loans and receivables are measured at amortized cost using the effective interest method less a provision for impairment.

(iv) Financial liabilities at amortized cost: Financial liabilities at amortized cost include trade and other payables, dividends payable, other current liabilities and long and short-term debt. Trade and other payables are initially recognized at the amount required to be paid, less, when material, a discount to reduce the payables to fair value. Subsequently, trade and other payables are measured at amortized cost using the effective interest method. Short and long-term debt is recognized initially at fair value, net of any transaction costs incurred, and subsequently at amortized cost using the effective interest method. Financial liabilities are classified as current liabilities if payment is due within twelve months. Otherwise, they are presented as non-current liabilities.

(v) Derivative financial instruments: The Company uses derivatives in the form of interest rate swaps and foreign exchange forward contracts to manage risks related to its variable rate debt and fluctuations in the value of the U.S. dollar. All derivatives have been classified as held-for-trading and are included on the balance sheet at their fair value. Interest rate swaps are included within long-term debt and foreign exchange forward contracts are included within trade and other receivables, and are classified as current or non-current based on the contractual terms specific to the instrument. Gains and losses on re-measurement of the interest rate swap are included in interest income (expense) and on foreign exchange forward contracts are included in unrealized gains and losses on derivative financial instruments.

The Company does not designate any of its derivative instruments as accounting hedges in accordance with IAS 39 and does not apply hedge accounting.

Impairment of financial assetsAt each reporting date, the Company assesses whether there is objective evidence that a financial asset is impaired. If such evidence exists, the Company recognizes an impairment loss, as follows:

(i) Financial assets carried at amortized cost: The loss is the difference between the amortized cost of the loan or receivable and the present value of the estimated future cash flows, discounted using the instrument’s original effective interest rate. The carrying amount of the asset is reduced by this amount either directly or indirectly through the use of an allowance account.


(ii) Available-for-sale financial assets: The impairment loss is the difference between the original cost of the asset and its fair value at the measurement date, less any impairment losses previously recognized in the statement of operations. This amount represents the cumulative loss in accumulated other comprehensive income that is reclassified to net income.

Impairment losses on financial assets carried at amortized cost are reversed in subsequent years if the amount of the loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized. Impair-ment losses on available-for-sale equity instruments are not reversed.

4. Accounting standards issued but not yet appliedIn November 2009, the IASB issued IFRS 9, Financial Instruments, which becomes effective for annual periods beginning on or after January 1, 2015.

In May 2011, the IASB issued the following standards: IFRS 10, Consolidated Financial Statements (IFRS 10), IFRS 11, Joint Arrangements (IFRS 11), IFRS 12, Disclosure of Interests in Other Entities (IFRS 12), IAS 27, Separate Financial Statements (IAS 27), IFRS 13, Fair Value Measurement (IFRS 13) and amended IAS 28, Investments in Associates and Joint Ventures (IAS 28). The adoption of these standards requires retrospective adoption with a transition date of January 1, 2012. These new standards are effective for the Company on January 1, 2013 and will not be early adopted.

The following is a brief summary of the new standards:

(a) IFRS 9 - Financial InstrumentsIFRS 9 addresses classification and measurement of financial assets and replaces the multiple category and measurement models in IAS 39 for debt instruments with a new mixed measurement model having only two categories: amortized cost and fair value through profit and loss. IFRS 9 also replaces the models for measuring equity instruments and such instru-ments are either recognized at fair value through profit and loss or at fair value through other comprehensive income.

Requirements for financial liabilities were added in October 2010 and they substantially carried forward existing require-ments under IAS 39, except that fair value changes due to credit risk for liabilities designated as fair value through profit and loss would generally be recorded in other comprehensive income.

(b) IFRS 10 - Consolidated Financial StatementsIFRS 10 requires an entity to consolidate an investee when it is exposed, or has rights, to variable returns from its involve-ment with the investee and has the ability to affect those returns through its power over the investee. Under existing IFRS, consolidation is required when an entity has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. IFRS 10 replaces Standing Interpretations Committee (“SIC”) 12, Consolida-tion-Special Purpose Entities, and parts of IAS 27, Consolidated and Separate Financial Statements.

(c) IFRS 11 - Joint Arrangements IFRS 11 requires a venturer to classify its interest in a joint arrangement as a joint venture or joint operation. Joint ventures will be accounted for using the equity method of accounting whereas for a joint operation the venturer will recognize its share of the assets, liabilities, revenue and expenses of the joint operation. Under existing IFRS, entities have the choice to proportionately consolidate or equity account for interests in joint ventures. IFRS 11 supersedes IAS 31, Interests in Joint Ventures, and SIC-13, Jointly Controlled Entities-Non-monetary Contributions by Venturers.

(d) IFRS 12 - Disclosure of Interests in Other Entities IFRS 12 establishes disclosure requirements for interests in other entities, such as joint arrangements, associates, special purpose vehicles and off balance sheet vehicles. The standard carries forward existing disclosures and also introduces significant additional disclosure requirements that address the nature of, and risks associated with, an entity’s interests in other entities.


(e) IFRS 13 - Fair Value Measurement IFRS 13 is a comprehensive standard for fair value measurement and disclosure requirements for use across all IFRS standards. The new standard clarifies that fair value is the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants, at the measurement date. It also establishes disclosures about fair value measurement. Under existing IFRS, guidance on measuring and disclosing fair value is dispersed among the specific standards requiring fair value measurements and in many cases does not reflect a clear measurement basis or consistent disclosures.

(f) Amendments to Other Standards In addition, there have been amendments to existing standards, including IAS 27, Separate Financial Statements, and IAS 28, Investments in Associates and Joint Ventures. IAS 27 addresses accounting for subsidiaries, jointly controlled entities and associates in non-consolidated financial statements. IAS 28 has been amended to include joint ventures in its scope and to address the changes in IFRS 10 to 13.

The Company is in the process of assessing the impact of these new standards. The Company has performed a prelim-inary assessment of the new standards with respect to its joint arrangements. The Company currently accounts for these entities using proportionate consolidation (refer to Note 26 to these financial statements). Under IFRS 11, Joint Arrangements, the Company expects that it will be required to equity account for these investments. This will result in material adjustments to the classification and presentation of the Company’s statement of operations, balance sheets and statement of cash flows commencing on January 1, 2013. The Company also expects that IFRS 12, Disclosure of Inter-ests in Other Entities, will impact the required financial statement disclosures for its subsidiaries, joint arrangements and associates.

In 2011, IAS 19, Employee Benefits, was amended to include new guidance with respect to pension plans. A number of these changes were previously optional under IFRS 19, Employee Benefits, and were implemented by the Company on initial adoption of IFRS on January 1, 2011. Additional changes will be required to be adopted on January 1, 2013 includ-ing the methodology for determining the Company’s annual pension expense for defined benefit pension arrangement, recognition of past service cost, presentation of statements of operations and note disclosures.

5. Critical accounting estimates and judgementsThe preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise judgement in the process of applying the accounting policies. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances. The result-ing accounting estimates will, by definition, seldom equal the related actual results.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Estimated impairment of goodwill and assets with indefinite livesIn accordance with the accounting policy stated in Note 3(k), the Company annually tests whether goodwill and intangi-ble assets with indefinite lives have incurred any impairment. The tests incorporate assumptions regarding future events, specifically growth rates and discount rates, which may or may not occur, resulting in the need for future revisions of estimates. There are also judgements involved in determination of CGUs and groups of CGUs.

(b) Retirement benefit assets/obligationsThe asset/liability in respect of the defined benefit pension plan is calculated as the defined benefit obligation less plan assets and other adjustments. The methodology utilized by the Company to determine the benefit obligation is consis-tent with the prior year.


(c) Income taxesThe Company is subject to income taxes in Canada and in certain of its foreign operations. Management has estimated the income tax provision and deferred income tax balances in accordance with its interpretation of the various income tax laws and regulations. It is possible, due to complexity inherent in estimating income taxes, that the tax provision and deferred income tax balances could change.

(d) Derivative financial instrumentsThe fair values of over-the-counter derivatives are determined using valuation techniques adopted by management with assumptions that are based on market conditions existing at each balance sheet date. The fair values of interest rate swaps are calculated as the present value of the estimated future cash flows.

(e) Fair value assessment business combinationsOn the acquisition of a business, the Company is required to identify and measure the various assets and liabilities acquired. This is based on the estimated fair value of each item acquired with the remainder of the purchase price being recognized as goodwill.

(f) Estimated useful livesManagement estimates the useful lives of property, plant and equipment and amortizing intangible assets based on the period during which the assets are available for use. The amounts and timing of depreciation and amortization for these amounts are affected by the useful lives. The estimates are reviewed annually and are updated for changes in the expected useful life.

(g) Utilization of tax lossesThe recognition of income tax assets (Note 20), including those in associates, related to the utilization of non-capital losses requires significant judgement and is subject to uncertainty as to the timing and ability to utilize the losses in the future.


6. Acquisitions(a) On April 1, 2012, the Company acquired control of its joint venture partner Alta Newspaper Group Limited Partnership

(“ANGLP”). In accordance with IFRS 3, this acquisition was treated as a step acquisition by the Company, whereby its existing investment was disposed of at April 1, 2012 and a new investment reacquired resulting in a gain of $1.1 million. Effective April 1, 2012, the Company accounts for its investment in ANGLP as a subsidiary and consolidates the financial position and results of the Company. Prior to April 1, 2012, the Company accounted for its investment in ANGLP using proportionate consolidation in accordance with IAS 31.

The consideration paid is equal to the net carrying value of the Company’s interest in ANGLP immediately prior to the acquisition of control including net working capital, property plant and equipment, intangible assets, goodwill, and long term debt. The non-controlling interest was valued at the minority shareholders percentage of the net assets of the ANGLP on April 1, 2012. The Company recognized a gain on the step acquisition of $1.1 million. The acquired assets and liabilities have been allocated as follows:

(thousands of dollars)$

Assets acquiredCash 2,154Trade receivables 4,421Inventory 295Prepaid assets 337Property, plant and equipment 8,469Intangible assets 25,680Goodwill 69,472

110,828Liabilities assumed

Trade payables and accrued liabilities 1,311Deferred revenues 1,453Deferred income taxes 1,866Long term debt 31,042Post employment benefits 668

36,340

Non-controlling interest 31,474

Consideration 41,912

Gain on acquisition 1,102

(b) During the year ended December 31, 2012, the Company and its affiliates completed a number of smaller acquisitions including the assets of the National Buyer Seller Forum trade show, Commodity News Service, Weather Farm and a 50% interest in a number of small Alberta community media publications. The total purchase price for these acquisi-tions was $1.1 million.

(c) During the year ended December 31, 2012, the Company and its affiliates completed the purchase accounting for its acquisition of trade publications from Rogers Publishing Limited in May 2011. The completion of the acquisition accounting resulted in an increase in intangible assets of $1.6 million, a decrease in goodwill of $1.5 million and an increase in deferred tax liabilities of $0.1 million.


(d) During the year ended December 31, 2012, the Company and its affiliates completed the purchase accounting for its acquisition of community media assets from Postmedia Networks Inc. on November 30, 2011. The acquired assets and liabilities have been allocated as follows upon finalization:


Assets acquiredTrade receivables 10,248Prepaid assets 183Other assets 804Property, plant and equipment 7,706Intangible assets 8,840Goodwill 6,309

34,090Liabilities assumed

Trade payables and accrued liabilities 2,288Deferred revenues 227Deferred income taxes 553

3,068

Consideration 31,022

In accordance with IFRS, as a result of finalizing the purchase accounting, the December 31, 2011 financial statements have been restated for these amounts. The restatement consisted of adjustments to the consolidated balance sheet but did not impact net income for the year ended December 31, 2011.

(e) During the year ended, December 31, 2011, the Company completed a number of other acquisitions including an event management company, additional community media newspapers and a number of trade shows. The total purchase price for these acquisitions was $2.8 million.

7. Investment in associatesInvestment in associates includes the following investments:

(a) A 28% equity interest in Continental Newspapers Ltd. (“Continental”), which owns and operates newspapers in British Columbia and Ontario. Continental has a March 31 year end.

(b) A 50% equity interest in InfoMine Inc. (“InfoMine”) which operates online and digital services to the mining industry. The Company does not control InfoMine as it does not have a majority of members on the Board of Directors nor does it have voting control over the company.

(c) A 59% equity interest in a private holding company. The Company does not have control over this investment as it does not have a majority of members on the Board of Directors nor does it have voting control over the company.

(d) A 49% equity interest in a community newspaper.

The investment in its various associates consists of the following:

(thousands of dollars) 2012 2011$ $

Balance, beginning of year 62,369 22,890Investment in associates 228 25,036Share of earnings for the period (a) 269 16,257Share of other comprehensive income (loss) income for the period 942 (275)Dividends received and other equity movements (1,871) (1,539)

Balance, end of year 61,937 62,369


(a) Included in earnings from associates for the year ended December 31, 2011, is the Company’s $15.1 million share of a one-time gain of $25.7 million relating to recognition of tax assets within one of the Company’s associates.

The following summarizes financial information about the assets, liabilities, revenues, net income (loss), and other comprehensive income (loss) of the Company’s associate entities and are reported at the values reported by each associate. The amounts disclosed include adjustments made to the carrying amount of assets and liabilities of the associate on acquisition if applicable.


Assets 175,816 189,440Liabilities 60,722 71,929Revenues 92,963 41,684Net income (loss) for the year 448 31,326Other comprehensive income (loss) 1,601 (467)

8. Other investmentsOther investments include interests in both publicly traded and private print and digital media companies.

9. Property, plant and equipment

(thousands of dollars) Land BuildingsProduction equipment

Office equipment

and leaseholds Total

$ $ $ $ $

CostBalance at December 31, 2010 11,790 19,909 48,052 21,738 101,489Additions (a) 298 3,998 3,144 4,095 11,535Acquisitions on business combinations 5,106 1,771 280 1,501 8,658Disposals (330) (674) (1,443) (2,361) (4,808)Exchange differences – – – (13) (13)Impairment – – (352) – (352)

Balance at December 31, 2011 16,864 25,004 49,681 24,960 116,509Additions (a) – 3,192 7,583 3,031 13,806Acquisitions on business combinations 1,569 3,774 3,236 200 8,779Adjustment (b) (540) (2,895) (3,037) (1,231) (7,703)Disposals (206) (255) (305) (163) (929)

Balance at December 31, 2012 17,687 28,820 57,158 26,797 130,462

Accumulated depreciation

Balance at December 31, 2010 – 736 22,151 16,853 39,740Additions – 1,172 3,128 1,408 5,708Disposals – (250) (1,337) (1,195) (2,782)

Balance at December 31, 2011 – 1,658 23,942 17,066 42,666Additions – 1,051 3,132 2,438 6,621Adjustment (b) – (256) (1,306) (1,330) (2,892)Disposals – (35) (250) (28) (313)

Balance at December 31, 2012 – 2,418 25,518 18,146 46,082

Carrying amountsAt December 31, 2011 16,864 23,346 25,739 7,894 73,843

At December 31, 2012 17,687 26,402 31,640 8,651 84,380


(a) At December 31, 2012, there is $5.2 million (2011: $ nil) in production equipment under construction that has not been placed in use for which no depreciation has been recorded for the year. Also included in production equipment are assets held under a finance lease (Note 13 (c)).

(b) On April 1, 2012, the Company recorded a deemed disposal of property, plant and equipment related to the step acqui-sition of control of ANGLP (Note 6 (a)).

10. GoodwillThe Company has goodwill related to various business combinations as follows:


Balance, beginning of period 207,139 199,832Acquisition on business combinations 27,925 8,244Disposition (179) –Impairment (a) (6,824) (937)


(a) In each of fiscal 2012 and 2011, the Company conducted its annual impairment test of goodwill. The Company used the aggregate recoverable amount of the assets included in each CGU or group of CGUs and compared it to their respective carrying amounts. Recoverable amount has been determined based on the value in use of the CGUs or groups of CGUs using five year cash flow budgets approved by management that made maximum use of observable market inputs and outputs. For periods beyond the budget period, cash flows were extrapolated using growth rates consistent with the historical average group rates in the respective CGU or groups of CGUs and taking into account expected future operating results, cost savings achieved through cost savings initiatives, economic conditions and outlook for the industry within which the reporting unit operates. Key assumptions for all CGUs or groups of CGUs included in the 2012 testing are: annual growth rates of 1.0% - 5.0% (2011: 1.0% - 3.5%) and pre-tax discount rates of 8.0% (2011: 6.9% - 9.6%).

In fiscal 2012, the Company recorded impairments of $6.8 million to its goodwill of which $4.3 million was included in the Business and Professional group of CGUs, $2.4 million was included in the BC Community Media group of CGUs and $0.1 million was included in the Other Trade Information group of CGUs. In fiscal 2011, the Company recorded impairments of $0.9 million to its goodwill of which $0.2 million was included in the Business and Profes-sional group of CGUs and $0.7 was included in the Other Trade Information group of CGUs.


11. Intangible assetsThe Company has various intangible assets including customer relationships, subscription lists, mastheads, software, websites, copyrights and trademarks. Of these, certain mastheads and trademarks are considered to have an indefinite life and are therefore not amortized.

Intangible assets are as follows:

Indefinite life Amortizing

(thousands of dollars)

Mastheads and

Trademarks CopyrightsCustomer

relationshipsSubscription

listsSoftware and

websites Total$ $ $ $ $ $

CostBalance at December 31, 2010 94,071 20,274 72,768 3,017 11,957 202,087Additions – – 155 – 3,797 3,952Acquisitions on business combinations 7,200 – 7,683 160 – 15,043Impairment (237) (7,625) – – – (7,862)

Balance at December 31, 2011 101,034 12,649 80,606 3,177 15,754 213,220Additions – – 276 30 2,760 3,066Acquisitions on business combinations 10,699 – 16,733 356 – 27,788Adjustment (a) (8,449) – (14,238) – – (22,687)Impairment (643) (168) (111) – (756) (1,678)

Balance at December 31, 2012 102,641 12,481 83,266 3,563 17,758 219,709

Accumulated amortizationBalance at December 31, 2010 – 8,008 19,380 2,702 8,564 38,654Amortization – 883 5,215 5 2,254 8,357

Balance at December 31, 2011 – 8,891 24,595 2,707 10,818 47,011Amortization – 884 6,314 45 2,037 9,280Adjustment (a) – – (4,314) – – (4,314)

Balance at December 31, 2012 – 9,775 26,595 2,752 12,855 51,977

Carrying amountsAt December 31, 2011 101,034 3,758 56,011 470 4,936 166,209At December 31, 2012 102,641 2,706 56,671 811 4,903 167,732

(a) On April 1, 2012, the Company recorded a deemed disposal of property, plant and equipment related to the step acqui-sition of control of ANGLP (Note 6 (a)).

Non-amortizing intangible assets In each of fiscal 2012 and 2011, the Company conducted its annual impairment test of non-amortizing indefinite life intangible assets. The Company used the aggregate recoverable amount of the non-amortizing intangible assets included in each CGU or group of CGUs, and compared it to their respective carrying amounts. The recoverable amount is based on the value in use using five year budgeted revenues to determine the relief from royalties that the mastheads and trade-marks provide. For periods beyond the budget period, revenues were extrapolated using growth rates consistent with the historical average rates. Key assumptions for all CGUs or groups of CGUs included in the 2012 testing are: royalty rates of 3.5% - 5.0% (2011: 3.5% - 4.5%), annual revenue growth rates of 4.0% - 7.5% (2011: 6.75% - 12.0%) and pre-tax discount rates of 8.0% (2011: 6.9% - 9.6%).


Amortizing intangible assets The Company also reviewed indicators of impairment on its amortizing intangible assets in both 2012 and 2011. In 2012, the Company identified certain copyright assets that required additional testing. In 2011, the Company identified certain copyright and customer relationship assets that required additional testing.

CopyrightsThe Company used the aggregate recoverable amount of the copyright assets and compared it to the carrying amount. The recoverable amount is based on the value in use using five year budgeted revenues to determine the relief from royalties that the copyrights provide. For periods beyond the budget period, revenues were extrapolated using growth rates consistent with the historical average rates. Key assumptions included in the 2012 testing are: royalty rates of 5.0% - 8.0% (2011: 5.0% - 8.0%), annual growth rates of 1.0% - 3.5% (2011: 1.0% - 3.5%), and pre-tax discount rates of 8.0% (2011: 6.9% - 9.6%).

Customer relationshipsThe Company used the aggregate recoverable amount of its customer relationship assets and compared it to the carrying amount. Recoverable amount has been determined based on the value in use of the CGUs using five year cash flow budgets approved by management that made maximum use of observable market inputs and outputs. For periods beyond the budget period, cash flows were extrapolated using growth rates consistent with the historical average group rates in the respective business segments and taking into account expected future operating results, cost savings achieved through cost savings initiatives, economic conditions and outlook for the industry within which the reporting unit operates. Key assumptions included in the 2011 testing are: budgeted margin of 15.0% - 20.0%, annual growth rates of 1.0% - 3.7%, and pre-tax discount rates of 6.9% - 9.6%. Testing of customer relationships was not required in 2012.

In fiscal 2012, the Company recorded an impairment of $0.6 million on its non-amortizing intangible assets in the BC Community Media group of CGUs. In addition, the Company recorded impairment of $1.1 million on certain amortizing intangible assets, of which $0.8 million were related to website hosting assets that are no longer in use in the BC Commu-nity Media group of CGUs and $0.3 million were related to certain assets in the Business and Professional group of CGUs.

In fiscal 2011, the Company recorded an impairment of $0.3 million on its non-amortizing intangible assets and $7.6 million on certain amortizing intangibles, of which $7.6 million was in the Business and Professional group of CGUs and $0.3 million was in the Prairie Newspaper group of CGUs.

12. Trade and other payables


Trade payables 12,278 12,353Accrued liabilities 19,874 21,318

32,152 33,671Trade payables due to related parties (Note 25) 7 409

32,159 34,080

All trade payables are due within three months of year end.


13. Long-term debtThe Company has the following long-term debt outstanding:


CurrentANGLP non-recourse debt (b) 6,736 4,463Finance lease liability (c) 660 1,638Mortgages and other loans 6,353 4,623

13,749 10,724Non-currentRevolving bank loan (a) 97,000 112,669ANGLP non-recourse debt (b) 18,727 15,155Finance lease liability (c) – 756Mortgages and other loans 2,381 692

118,108 129,272

131,857 139,996

Changes to the Company’s debt obligation for the years ended December 31, 2012 and 2011 were as follows:


Balance, beginning of year 139,996 94,202Proceeds from additional borrowings 16,858 56,179Financing charges 251 327Principal portion of finance lease payments (1,556) (1,527)Repayment of debt (23,692) (9,185)


(a) Revolving bank loanGlacier has a revolving bank loan facility with a syndicate of major Canadian banks which requires no principal repay-ments during its term, and matures on March 30, 2015. The maximum that can be drawn on the amended facility is depen-dent on the Company’s debt to earnings ratio. The facility bears interest at varying rates based on the prevailing bankers’ acceptance rate plus an acceptance fee which ranges from 1.50% to 2.75% or the bank prime rate plus 0.50% to 1.75%, depending on Glacier’s debt to earnings ratio. The facility is secured by a general security agreement including fixed and floating charges over all of Glacier’s and its subsidiaries’ assets.

Under various financing arrangements with its banks, the Company is required to meet certain covenants. The Company was in compliance with these covenants at December 31, 2012 and 2011.

(b) Alberta Newspaper Group Limited Partnership Alberta Newspaper Group Limited Partnership (“ANGLP”) has entered into separate senior term loan facilities with a company that is related, due to common ownership, to Glacier. The facilities bear interest at varying rates based on the prevailing bankers acceptance rate plus an acceptance fee which ranges from 2.00% to 3.50% or the bank prime rate plus 0.50% to 2.125%, depending on ANGLP’s debt to earnings ratio. The facilities are secured by a charge over the property of ANGLP.

At December 31, 2012, ANGLP has $25.5 million outstanding on its senior loan facilities which matures on November 1, 2016. The facility requires annual payments of $5.6 million plus interest until September 1, 2013 and $6.7 million plus interest thereafter.

On April 1, 2012, the Company acquired control of ANGLP and as a result recorded an additional $12.6 million in long term debt owing by ANGLP (Note 6 (a)). The debt is non-recourse to the Company.


(c) Finance lease obligationThe Company has certain lease arrangements which are considered finance lease arrangements. They are secured by the related equipment which is included in property plant and equipment. The total carrying value of these leased assets at December 31, 2012 is $5.3 million. The finance lease liabilities at December 31, 2012 consist of the future minimum lease payments of $0.7 million less interest of $ nil.

The total repayment of principal on interest bearing debt obligations and finance lease obligations is as follows:

(thousands of dollars) Long Term DebtFinance Lease

Obligations Total$ $ $

2013 13,088 660 13,7482014 6,868 – 6,8682015 103,317 – 103,3172016 5,676 – 5,6762017 179 – 179Thereafter 2,069 – 2,069

131,197 660 131,857

14. Post employment benefit obligations The Company has defined benefit pension plans which cover certain employees. The plans provide pensions based on length of service and final average annual earnings. The Company also has health care plans covering certain hourly and retired salaried employees. Information about the Company’s salaried pension plans and other non-pension benefits, in aggregate, is as follows:

The amounts recognized in the balance sheets are as follows:

(thousands of dollars) 2012 2011

Pension benefit plans

Other benefit plans


Other benefit plans

$ $ $ $Present value of benefit obligations (42,146) (3,968) (35,911) (3,716)Fair value of plan assets 33,630 – 29,156 –

Funded status of plans (defecit) surplus (8,516) (3,968) (6,755) (3,716)

The movement in the defined benefit obligation is as follows:

Pension Benefit Plans Other Benefit Plans(thousands of dollars) 2012 2011 2012 2011

$ $ $ $Balance, beginning of year 35,911 28,980 3,716 3,266Current service cost 2,348 1,836 204 180Actuarial losses (gains) 1,526 4,616 (60) 144Interest cost 1,654 1,576 164 181Benefits paid (1,062) (1,116) (56) (55)Acquisition (Note 6) 1,769 – – –Other – 19 – –

Balance, end of year 42,146 35,911 3,968 3,716


The movement in the fair value of the plan assets for the year is as follows:


$ $ $ $Balance, beginning of year 29,156 29,274 – –Return on plan assets 2,151 (727) – –Employer contributions 1,323 1,043 56 55Employee contributions 538 587 – –Benefits paid (1,062) (1,116) (56) (55)Acquisition (Note 6) 1,544 – – –Other (20) 95 – –

Balance, end of year 33,630 29,156 – –

The total expense recognized in the statement of operations is as follows:


$ $ $ $Current service cost 1,803 1,370 204 181Interest cost 1,654 1,576 164 180Expected return on plan assets (2,006) (2,024) – –Other 44 – – –

1,495 922 368 361

The principal actuarial assumptions were as follows:

2012 2011


Other benefit plans


Other benefit plans

% % % %Benefit obligationsDiscount rate 4.00 - 6.00 4.00 4.25 - 6.00 4.25Rate of compensation increases 3.00 - 3.50 3.00 3.00 - 3.50 3.00

Net benefit expenseDiscount rate 4.25 - 6.00 4.25 5.25 - 6.00 5.25Expected return on plan assets 6.00 - 6.75 – 6.00 - 7.00 –Rate of compensation increases 3.00 - 3.50 3.00 3.00 - 3.50 3.00

The assumed trend in health care costs was as follows:

2012 2011


Other benefit plans


Other benefit plans

% % % %Initial health care cost trend rate – 8.00 – 8.00Annual rebate of decline in trend rate – 1.00 – 1.00Ultimate health care trend rate – 5.00 – 5.00

Year ultimate rate is reached – 2016 – 2016


The discount rate utilized has a significant effect on the amounts reported for the other benefit plans. A one-percentage-point change in the discount rate would have the following effects:

2012 2011

1% increase

1% decrease

1% increase

1% decrease

$ $ $ $Change in deferred benefit obligation

as at December 31 (435) 487 (425) 479

Change in service cost (33) 39 (32) 38

Assumed health care cost trend rates have a significant effect on the amounts reported for the other benefit plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects:

2012 2011

1% increase

1% decrease

1% increase

1% decrease

$ $ $ $Total service and interest cost components

during the year 8 (9) 7 (8)Post-retirement accrued benefit

obligations at December 31 126 (139) 126 (139)

The plan assets are comprised of:

2012 2011% %

Equity instruments 73 75Debt instruments 13 13Other 14 12

100 100

The expected return on plan assets is determined by considering the expected returns available on the assets underlying the current investment policy. Expected yield on fixed interest investments are based on gross redemption yields as at the end of the reporting period. Expected returns on equity investments reflect long-term real rates of return experi-enced in the respective markets.

Expected contributions to the benefit plans for the year ended December 31, 2013 are $1.7 million. At December 31, 2012 the accumulated actuarial losses recognized in other comprehensive income were $12.4 million (2011: $10.8 million).

15. Contingencies and commitments(a) The Company has the following guarantees and contingencies at December 31, 2012.

(i) In connection with certain dispositions of assets and/or businesses, the Company and/or its affiliates have indem-nified the purchasers in the event that a third party asserts a claim against the purchaser that relates to a liabili-ty retained by the Company. These types of indemnification guarantees typically extend for a number of years. The Company is unable to estimate the maximum potential liability for these indemnifications as the underlying agreements do not always specify a maximum amount and the amounts are dependent upon the outcome of future contingent events, the nature and likelihood of which cannot be determined at this time. Historically, the Company and its other affiliates have not made any significant indemnification payments under such agreements and no amount has been accrued in the consolidated balance sheet with respect to these indemnification guarantees.


(ii) An affiliated entity has been named as a co-defendant in a series of disputes, investigations and legal proceed-ings relating to transactions between Sun Times Media Group, Inc. (formerly Hollinger International Inc.) (“Sun Times”) and certain former officers and directors of Sun Times and its affiliates. The ultimate outcome of these proceedings to the affiliated entity is not determinable.

(iii) The Company and certain of its affiliates have also been named as defendants in certain legal actions incurred in the normal course of business, none of which management believes will have a material impact on the results of operations and financial position of the Company.

No provision or contingency has been recorded for these items at December 31, 2012 or December 31, 2011.

(b) The Company and its subsidiaries have entered into operating leases for premises and office equipment, which expire on various dates up to 2022.

The minimum annual lease payments are required as follows:


2013 5,1842014 4,0522015 3,1412016 2,6722017 2,442Thereafter 4,989

22,480

16. Share capitalAt December 31, 2012 and 2011, the Company has authorized an unlimited number of common shares without par value and an unlimited number of preferred shares.

At December 31, 2012, the Company has 89,243,102 (2011: 89,358,410) common shares outstanding.

At December 31, 2012 and 2011, the Company did not have any preferred shares issued.

The Company had the following common share options and warrants issued:

2012 2011

Common shares options

Weighted average exercise price

Common shares options

Weighted average exercise price

$ $Options outstanding at beginning of year 1,575,000 3.01 1,100,000 3.25Granted – – 475,000 2.44Exercised – – – –Expired (1,100,000) 3.25 – –

Outstanding at end of year 475,000 2.44 1,575,000 3.01

Exerciseable at end of year 475,000 2.44 1,575,000 3.01

During the year ended December 31, 2012, the Company repurchased for cancellation 115,308 shares at a price of $1.75 under its September 2012 Normal Course Issuer Bid (“NCIB”).

On September 28, 2012, the Company filed a renewed normal course issuer bid (“September 2013 NCIB”) which autho-rized the Company to repurchase for cancellation up to 2,500,000 common shares until September 27, 2013.


The Company has a stock option plan for officers, directors and certain employees. The maximum number of options available for issuance is 2,238,348. On March 30, 2011, the Company granted 475,000 share purchase options to certain directors and senior management. The options entitle the holder to acquire a common share of the Company at an exercise price equal to the closing price of the common shares on the TSX on March 30, 2011, being $2.44, and expire on March 29, 2014. The Company recognizes compensation expense for all stock options awarded based on the fair value of the option on the date of grant. The fair value of the stock options granted in 2011 was estimated using the Black-Scholes option pricing model with the following weighted average assumptions: expected volatility of 40.4%; risk-free interest rate of 2.0%; expected life of three years; and annual dividend yield of 2.5%. Stock-based compensation cost of $ nil million has been recorded for the year ended December 31, 2012 (2011 - $0.3 million).

At December 31, 2012, the Company has 1,115,000 warrants outstanding allowing the holder to purchase one common share per warrant at $4.48 per share. The warrants will expire on June 28, 2014, unless extended.

17. Earnings per shareBasic earnings per share is calculated by dividing the net earnings attributable to common shareholders by the weighted average number of common shares outstanding during the year. Diluted earnings per share is calculated by dividing the net earnings available to common shareholders by the weighted average number of common shares during the period using the treasury stock method. Under this method, proceeds from the potential exercise of stock options are assumed to be used to purchase the Company’s common shares. Earnings used in determining earnings per share are presented below.

Income Shares Per share2012 $ $Basic EPS:

Net income 10,630 89,357,465 0.12Effect of dilutive securities – – –

Diluted EPS:Net income 10,630 89,357,465 0.12

2011 $ $Basic EPS:

Net income 25,731 89,991,561 0.29Effect of dilutive securities – – –

Diluted EPS:Net income 25,731 89,991,561 0.29


18. Other comprehensive income (loss)The components of other comprehensive income (loss) are as follows:

Accumulated other comprehensive income Retained earnings


Equity Securities classified

as available for sale

Cumulative Translation Adjustment Total

Actuarial gains

(losses) on defined

benefit plan Total

Non- controlling

interests

Total comprehensive

loss

$ $ $ $ $ $

Balance, December 31, 2011 (315) (126) (441) (8,085) (8,085) (273) (8,799)Cumulative translation adjustment – (27) (27) – – (1) (28)Actuarial (losses) on defined benefit plans – – – (953) (953) (38) (991)Unrealized (loss) on available for sale investments (81) – (81) – – (3) (84)Share of other comprehensive income from associates – – – 913 913 29 942Other comprehensive (loss) for the period (108) (40) (13) (161)

Balance, December 31, 2012 (396) (153) (549) (8,125) (8,125) (286) (8,960)

Balance, December 31, 2010 – (187) (187) (2,501) (2,501) (86) (2,774)Cumulative translation adjustment – 61 61 – – 2 63Actuarial (losses) on defined benefit plans – – – (5,318) (5,318) (170) (5,488)Unrealized (loss) on available for sale investments (315) – (315) – – (10) (325)Share of other comprehensive loss of associates – – – (266) (266) (9) (275)Other comprehensive (loss) for the period (254) (5,584) (187) (6,025)

Balance, December 31, 2011 (315) (126) (441) (8,085) (8,085) (273) (8,799)

Other comprehensive income items that do not recycle through the statement of operations in future periods are recorded directly in retained earnings.

Other comprehensive income items are reported net of the following tax effects:


Cumulative translation adjustment – –Actuarial (losses) on defined benefit plans 331 (1,830)Unrealized (loss) on available for sale investments 12 (42)Share of other comprehensive (loss) from associates – –

19. Other income(thousands of dollars) 2012 2011

$ $Asset Backed Commercial Paper (a) 3,136 –Fee income (b) 385 –Other income 182 –

3,703 –


(a) During the year ended December 31, 2012, the Company recognized $3.1 million of other income related to the redemption of miscellaneous asset-backed paper investments received in connection with an affiliated entity’s participation in the $6.3 million 2008 settlement between Sun Times Media Group and CanWest Global Commu-nications Inc. The Company’s participation in the settlement was previously reported in our December 31, 2008 financial statements. The carrying value of these investments was $ nil. The Company does not have any other such investments.

(b) During the year ended December 31, 2012, the Company received fee income related to providing a guarantee on the debt of one of its associates.

20. Income taxesIncome tax expense is recognized based on management’s estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual rate used for the year ended December 31, 2012 was 25.0% (2011: 26.5%). The components of income tax expense are shown in the following table:


Current tax 991 819Deferred tax 5,272 5,761

Income tax expense 6,263 6,580

The tax on the Company’s net income before tax differs from the amount that would arise using the weighted average tax rate applicable to consolidated profits of the Company as follows:


Net income before income taxes 21,204 34,299Tax rate 25.0% 26.5%

5,301 9,089Non-deductible expenses and other 510 4,350Effect of future tax rate reductions – (574)Income from associates – (4,308)Adjustment in respect of prior years 549 (1,977)Other (97) –

Income tax expense 6,263 6,580

The Company’s net deferred tax liability consists of the following:


Deferred Tax Assets:Available non-capital losses and other tax deductions 10,137 12,700Pension Asset & Post Retirement Benefit 3,255 2,300Deferred revenue 1,399 720

14,791 15,720

Deferred Tax Liabilities:Property, plant and equipment (8,683) (5,172)Intangible assets (25,343) (27,928)Deferred income and other (6,372) (6,098)

(40,398) (39,198)

(25,607) (23,478)


The Company has recognized non-capital tax loss and other deductions of approximately $ nil (2011 - $23.2 million) that can be carried forward and may be used to reduce future year’s net income for tax purposes from the Canadian tax jurisdictions.

The Company has recognized SRED expenditures of $24.2 million (2011 - $25.4 million) that can be carried forward indef-initely to offset against Company’s future year’s net income for tax purposes.

The Company also has investment tax credits of $5.9 million (2011 - $5.9 million) that can be carried forward to be used to reduce future year’s federal tax payable. The credit carryforwards, if unused, expire between 2018 and 2025.

21. Net interest expenseThe net interest expense for the years ended December 31, 2012 and 2011 is comprised of:


Interest income (19) (38)Interest expense 6,093 4,654

Net interest expense 6,074 4,616

22. Other expenses(thousands of dollars) 2012 2011

$ $Restructuring expense (a) 1,351 1,555Stock based compensation (b) – 289Transaction and transition costs (c) 2,077 1,077Other 357 345

3,785 3,266

(a) Restructuring expenseDuring the year ended December 31, 2012, restructuring expenses of $1.4 million were recognized (2011 - $1.6 million). Restructuring expenses were recognized with respect to severance costs incurred as the Company restructured and reduced its workforce.

(b) Stock based compensation As disclosed in Note 16, on March 30, 2011, the Company granted 475,000 share purchase options to certain directors and senior management. The options entitle the holder to acquire a common share of the Company at an exercise price equal to the closing price of the common shares on the Toronto Stock Exchange (TSX) on March 30, 2011 being $2.44 and expire on March 29, 2014.

(c) Transaction and transition costsThe Company incurred costs related to its acquisitions completed in 2012 and 2011. These costs include both the costs of completing the transaction and the costs of integrating these new operations into the Company. Transaction costs include legal, accounting, due diligence, consulting and general acquisition costs. Transition costs include information technology costs, transitional staffing requirements, service fees paid to the vendor during the transition period and other costs directly related to the operational integration of the newly acquired businesses.


23. Expense by nature


Wages and benefits 145,414 117,847Newsprint, ink and other printing costs 46,062 36,320Delivery costs 30,160 19,894Rent, utilities and other property costs 12,808 10,613Advertising, marketing and other promotion costs 13,103 10,232Third party production and editorial costs 14,766 8,230Legal, bank, insurance and professional services 6,500 6,262Data services, system maintenance, telecommunications and software licenses 5,503 5,262Other 5,307 3,594

279,623 218,254

Direct expenses 220,342 168,018General and administrative expenses 59,281 50,236

279,623 218,254

Expenses for the year ended December 31, 2012 include the additional share of ANGLP’s operations from April 1, 2012 as a result of the Company’s acquisition of control (Note 6 (a)) and expenses from the Postmedia acquisition on November 30, 2011.

24. Wages and employee benefits expenseWages and benefit expense for the year consist of the following:


Salaries and wages 130,173 115,285Pension and benefit plan costs 14,327 1,599Share-based payments – 289Other 914 674

145,414 117,847

Compensation awarded to key management for the year consists of:


Salaries and short term benefits 4,504 3,891Share-based payments – 289

4,504 4,180

Key management includes the Company’s directors, officers and divisional managers.

25. Related party transactionsIn addition to other related party disclosures in the financial statements, the Company has the following related parties with which it completed transactions:

(a) During the year ended December 31, 2012, the Company and its affiliates recorded administration, consulting and interest expenses of $2.5 million (2011: $1.7 million) from Madison Venture Corporation (“Madison”) and its subsid-iaries. Madison is a minority shareholder of the Company and certain of its officers and directors are officers and directors of the Company. Madison provides strategic, financial, transactional advisory services and administrative services to Glacier on an ongoing basis.


This has been done with the intention of maintaining an efficient and cost effective corporate overhead structure, instead of i) hiring more full-time corporate and administrative staff and thereby increasing fixed overhead costs and ii) retain-ing outside professional advisory firms on a more extensive basis. These services were provided in the normal course of operations and were measured at the exchange amount, which represented the amount of consideration established and agreed to by the related parties. Included in trade payables at December 31, 2012 was $ nil (2011: $0.4 million) due to Madison.

(b) At December 31, 2012, the Company had amounts due to InfoMine of $1.6 million (2011: $3.2 million) related to deferred payments on the acquisition of the Company’s 50% interest in InfoMine. These amounts are non-inter-est bearing and are due on demand except for $0.5 million which is due on November 10, 2013. These amounts are included in other current liabilities.

(c) At December 31, 2012, the Company had amounts due from an associated private holding company of $2.7 million (2011: $0.6 million) for non-operating amounts related to the initial acquisition and integration of the related company. These amounts are non-interest bearing and have no fixed terms of repayment.

26. Joint venturesAt December 31, 2012, the Company exercised joint control over the operations of Great West Newspapers Limited Partnership (“Great West”), Fundata Canada Inc. (“Fundata”), and Rhode Island Suburban Newspaper Inc. (“RISN”). The balances below, representing the Company’s ownership interests in these operations, have been proportionately consolidated in the Company’s consolidated financial statements.

The following balances at December 31, 2012 and for the year ended do not include the Company’s ownership interest in ANGLP as the Company acquired control on April 1, 2012 and therefore fully consolidated these results. The results for the year ended December 31, 2012, include our proportionate share of 59.5% of ANGLP for the period from January 1, 2012 to March 31, 2012. The balances below for the year ended December 31, 2011, and as at December 31, 2011, reflect the Company’s proportionate consolidation of ANGLP, which was 59.5%.


Statement of operationsRevenues 33,227 48,484Costs and expenses 25,349 38,607

Net income 7,878 9,877

Balance sheetCash and cash equivalents 3,983 6,093Other current assets 7,317 10,349Property, plant and equipment 18,013 15,307Intangible assets 16,032 36,274Goodwill 26,490 67,087Trade and other payables (2,995) (3,814)Other current liabilities (12,563) (13,631)Long-term debt (1,883) (15,616)Deferred income tax (472) (8,410)

Net assets 53,922 93,639

27. Supplemental cash flow information(thousands of dollars) 2012 2011

$ $Interest paid 5,936 3,602Income taxes paid 825 1,085


28. Segment disclosureThe Company and its subsidiaries operate in two distinct operating segments throughout Canada and the United States. These segments are the business and professional market that Specialty Technical Publishers (“STP”), CD-Pharma, EcoLog and Fundata operate in and the community media and trade information market in which the rest of Glacier’s businesses operate. All of the Company’s assets are located in Canada except the assets of a joint venture located in the United States. The following segment information is as at and for the year ended December 31, 2012 and 2011:


Community Media and Trade

InformationBusiness and Professional

Corporate and Other Consolidated

2012 $ $ $ $RevenueCanada 301,047 12,302 – 313,349United States 13,264 3,403 – 16,667

330,016Income (loss) before interest, taxes, depreciation and amortization 45,555 4,987 (149) 50,393

Interest 5,785 289 – 6,074Amortization and depreciation 14,913 988 – 15,901Impairment 3,879 4,624 – 8,503Other expenses 2,259 (17) 1,543 3,785Other income (567) – (3,136) (3,703)Income tax 5,965 298 – 6,263Share of (earnings) loss from associates (269) – – (269)Gain on acquisition (1,102) – – (1,102)Segment Net income 14,692 (1,195) 1,444 14,941

Assets 585,167 38,857 13 624,037Capital expenditures 16,083 789 – 16,872Investment in associate 61,937 – – 61,937


Community Media and Trade

InformationBusiness and Professional

Corporate and Other Consolidated

2011 $ $ $ $RevenueCanada 241,121 10,908 – 252,029United States 11,942 3,423 – 15,365

267,394Income (loss) before interest, taxes, depreciation and amortization 44,663 4,516 (39) 49,140

Interest 4,369 247 – 4,616Amortization and depreciation 13,118 947 – 14,065Impairment 1,344 7,807 – 9,151Other expenses 2,595 375 296 3,266Other income – – – –Income tax 6,246 334 – 6,580Share of (earnings) loss from associates (16,257) – – (16,257)Segment Net income 33,248 (5,194) (335) 27,719

Assets 550,493 41,252 11 591,756Capital expenditures 14,153 1,333 – 15,486Investment in associate 62,369 – – 62,369


29. Financial instruments

Financial risk managementThe Company’s activities result in exposure to a variety of financial risks, including risks relating to foreign exchange, credit, liquidity and interest rate risk. Details of these risks, how they arise and the objectives and policies for managing them are described as follows:

(a) Market risk

(i) Foreign exchange risk A small portion of the Company’s products are sold at prices denominated in U.S. dollars or based on prevailing U.S. dollar prices while the majority of its operational costs and expenses are incurred in Canadian dollars. Therefore, an increase in the value of the Canadian dollar relative to the U.S. dollar reduces the revenue in Canadian dollar terms realized by the Company from sales made in U.S. dollars. The Company also has investments in the U.S. with a differ-ent functional currency, whose net assets are exposed to foreign currency translation risk.

The Company currently hedges a portion of its foreign exchange exposure with financial forward contracts. As at December 31, 2012 Glacier had foreign exchange forward contracts to sell U.S.$100,000 per month which commenced in June 2012 at rates between CAD$1.030 and CAD$1.036, and expires in May 2013. During the year ended December 31, 2012 Glacier had foreign exchange forward contracts to sell U.S.$125,000 per month which commenced in April 2009 at a rate of CAD$1.162, and expired in April 2012. At December 31, 2012, the exchange contracts are recorded at fair market value of $0.1 million (2011: $0.1 million) and included in trade receivables. The Company has concluded that these contracts do not qualify for hedge accounting; therefore changes in fair value of the contracts are recorded in the statement of operations each year.

An assumed $0.01 increase in the USD/CAD foreign exchange rate during the year ended December 31, 2012 would have a $0.2 million (2011: $0.2 million) impact on pre-tax net income. An assumed $0.01 decrease would have an equal but opposite effect on pre-tax net income.

(ii) Interest rate riskThe Company’s interest rate risk mainly arises from the interest rate impact on cash and floating rate debt. The Company actively manages its interest rate risk through ongoing monitoring of market interest rates and the overall economic situation. Where appropriate, the Company has in the past and may in the future enter into derivative transactions to fix its interest rates.

An assumed 100 basis points increase in interest rates during the year ended December 31, 2012 would have a $1.3 million (2011: $1.0 million) impact on pre-tax net income. An assumed 100 basis points decrease would have had an equal but opposite effect on pre-tax net income.

(b) Credit riskCredit risk is risk of financial loss to the Company if a customer, a deposit taking institution, or third party to a derivative instrument fails to meet its contractual obligation.

The Company holds its cash and cash equivalents at major Canadian financial institutions in order to minimize the risk of default on the Company’s cash position.

The Company sells its products and services to a variety of customers under various payment terms and therefore is exposed to credit risks from its trade receivables from customers.

The Company has adopted policies and procedures designed to limit these risks. The carrying amounts for trade receiv-ables are net of applicable allowances for doubtful accounts and returns, which are estimated based on past experience, specific risks associated with the customer and other relevant information.

The Company is protected against any concentration of credit risk through its products, broad clientele and geographic diversity. As at December 31, 2012, no single customer accounts for more than 5% of consolidated trade receivables.


Management regularly monitors trade receivable aging, customer credit limits, performs credit reviews and provides allowances for potentially uncollectible trade receivables. The amounts disclosed in the consolidated balance sheets are net of allowances for doubtful accounts. The Company establishes an allowance for doubtful accounts that represents its estimate of incurred losses in respect of trade receivables. Trade receivables are impaired when there is evidence that collection is unlikely. At December 31, 2012, the Company had trade and other receivables of $62.3 million (2011: $58.7 million), net of allowance for doubtful accounts of $3.1 million (2011: $2.1 million).

Based on the historical payment trend of the customers, the Company believes that this allowance for doubtful accounts is sufficient to cover the risk of default.

The Company is also exposed to credit-related losses in the event of non-performance by counterparties to derivative instruments. The Company manages its counterparty risk by only entering into derivative contracts with major financial institutions with high credit ratings assigned by international credit-rating agencies as counterparties.

The maximum exposure to credit risk at the reporting date is the carrying value of cash, trade receivables and the credit risk of counter parties relating to the Company’s derivatives.

(thousands of dollars) 2012 2011Gross Impairment Gross Impairment

$ $ $ $Not past due 31,343 (76) 34,661 (39)Past due 0 - 30 days 20,841 (21) 14,178 (69)Past due 30 - 60 days 6,939 (39) 6,002 (132)Past due > 60 days 6,226 (2,944) 4,298 (1,815)

The movement in the allowance for impairment in respect of loans and receivables during the year was as follows:


Balance, beginning of year (2,055) (2,023)Impairment (loss), net recoveries (1,025) (32)

Balance, end of year (3,080) (2,055)

(c) Liquidity riskLiquidity risk is the risk that the Company will be unable to meet its financial obligations on a current basis. The Company is exposed to liquidity risk with respect to trade payables, long-term debt, derivatives and contractual obligations. Refer to Notes 12 and 13 for repayment terms of the Company’s financial liabilities.

The Company manages liquidity by maintaining adequate cash balances and by having appropriate lines of credit avail-able. In addition, the Company continuously monitors and reviews both actual and forecasted cash flows. Management believes that future cash flows from operations and the availability under existing banking arrangements will be adequate to support its financial liabilities.


Fair valueThe carrying value of certain financial instruments maturing in the short-term approximates their fair value. These financial instruments include cash and cash equivalents, trade receivables, trade payables, dividends payable, other current liabilities, and preferred shares in affiliates. The table below shows the fair value and the carrying value of other financial instruments as at December 31, 2012 and 2011.

The fair value is determined essentially by discounting cash flows or quoted market prices. The fair values calculated approximate the amounts for which the financial instruments could be settled between consenting parties, based on current market data for similar instruments. Consequently, as estimates must be used to determine fair value, they must not be interpreted as being realizable in the event of an immediate settlement of the instruments.

(thousands of dollars) 2012 2011Carrying values: $ $AssetsLoans and receivables

Cash and cash equivalents 5,216 9,206Trade and other receivables 62,284 58,818

67,500 68,024

Available for saleOther investments (at cost) 3,016 2,939Other investments (at fair value) 937 1,031

3,953 3,970

Fair value through profit and lossForeign exchange forward contract (91) (72)

(91) (72)

LiabilitiesAmortized cost

Trade payables 12,278 12,353Dividends payable – 2,770Other current liabilities 1,700 2,748Long term debt 131,857 139,996

145,835 157,867

2012 2011Fair value: $ $Assets

Other investments (at fair value) 937 1,031Foreign exchange forward contract (91) (72)

LiabilitiesLong term debt 131,857 139,996

Fair value hierarchyFor fair value estimates relating to derivatives and available-for-sale securities, the Company classifies its fair value measurements within a fair value hierarchy, which reflects the significance of the inputs used in making the measure-ments. The table below shows financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices)

Level 3 – Inputs for the asset or liability that are not based on observable market data


2012 Level 1 Level 2 Level 3$ $ $

Available for sale investments (at fair value) 937 – –Foreign exchange forward contract – (91) –

2011 Level 1 Level 2 Level 3$ $ $

Available for sale investments (at fair value) 1,031 – –Foreign exchange forward contract – (72) –

30. Capital disclosuresThe Company’s fundamental objectives in managing capital are to maintain financial flexibility in order to preserve its ability to meet financial obligations, ensure adequate liquidity and financial flexibility at all times, and deploy capital to provide an appropriate investment return to its shareholders while maintaining prudent levels of financial risk. The Company believes that the aforementioned objectives are appropriate in the context of the Company’s business.

The Company defines its capital as shareholders’ equity, long-term debt including the current portion, and preferred shares, net of any cash and cash equivalents.

The Company’s financial strategy is designed to maintain a flexible capital structure including an appropriate debt to equity ratio consistent with the objectives stated above and to respond to changes in economic conditions and the risk characteristics of underlying assets. In order to maintain or adjust its capital structure, the Company may purchase shares for cancellation pursuant to normal course issuer bids, issue new shares, raise debt (secured, unsecured, convert-ible and/or other types of available debt instruments), enter into hedging arrangements and refinance existing debt with different characteristics, amongst others.

The Company constantly monitors and assesses its financial performance and economic conditions in order to ensure that its net debt levels are prudent.

The Company’s financial objectives and strategy are reviewed on an annual basis. The Company believes that its ratios are within reasonable limits, in light of the relative size of the Company and its capital management objectives.

The Company is also subject to financial covenants in its operating credit facility agreement, which are measured on a quarterly basis. The Company is in compliance with all financial covenants at December 31, 2012 and 2011.

31. Subsequent eventIn March 2013, an affiliate of the Company received correspondence from Canada Revenue Agency (“CRA”) proposing to issue a notice of reassessment with respect to the utilization of non-capital losses by the affiliate, pertaining to taxation years 2008, 2009, 2010 and 2011. The Company believes that it has reported its tax position appropriately. No provision has been made in these financial statements for additional income taxes, if any, which may be determined to be payable on ultimate resolution of this matter. Should CRA issue the notice of reassessment, the Company’s affiliate would be obligated to pay an initial payment of fifty percent of the reassessed tax amount plus penalties and interest, in conjunction with appealing the reassessment. The Company believes its affiliate has substantial defences in response to the matters raised by CRA and would vigorously appeal any reassessment. Nevertheless, the initial payment upon appeal, as well as the proposed reassessment by CRA, if upheld, would have a material impact on the Company’s financial statements and cash flows. Notwithstanding, the Company’s affili-ate has the financial capacity to pay such amounts, if any. The likely timing to resolve this matter may take years.

Corporate Information

Board of DirectorsBruce W. Aunger*

John S. Burns, Q.C.*

Sam Grippo

Brian Hayward

S. Christopher Heming

Jonathon J.L. Kennedy

Geoffrey L. Scott*

* Member of the Audit Committee

OfficersSam Grippo, Chairman

Jonathon J.L. Kennedy, President & Chief Executive Officer

Orest Smysnuik, CA, Chief Financial Officer

Bruce W. Aunger, Secretary

Transfer AgentComputershare Trust Company of Canada

Toronto, Calgary and Vancouver

AuditorsPricewaterhouseCoopers LLP

Stock Exchange ListingThe Toronto Stock Exchange

Trading symbol: GVC

Investor RelationsInstitutional investors, brokers, security analysts and others requiring financial and corporate information about Glacier should visit our website www.glaciermedia.ca or contact: Orest Smysnuik, CA, Chief Financial Officer.

Registered Office1970 Alberta Street

Vancouver, BC V5Y 3X4

Phone: 604.872.8565

Fax: 604.879.1483

2012A N N U A LR E P O R T

www.g l a c i e r m e d i a . c a

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